Federal and State Cuts to 340B Drug Pricing Program Helen Jung - PowerPoint PPT Presentation

Federal and State Cuts to 340B Drug Pricing Program Helen Jung

340B Cuts: Bottom Line $1.6 billion will be cut from the program, effective January 1, 2018 Biggest Winners = For-Profit Hospitals Biggest Losers = Safety-Net Hospitals

340B Program in a Nutshell Pay at Sell at 6% 22.5% above below ASP ASP Deep discounts for DSH, children’s Wants savings to all covered hospitals, critical go to enhanced outpatient drugs access hospitals, services to free standing vulnerable patients cancer hospitals, sole community hospitals, rural referral centers *ASP: Average Sales Price

340B Proponents vs. Critics 340B allows hospitals to 340B hospitals use stretch scarce resources savings to increase to serve more low- profits and do not pass income patients and those savings on to communities patients

340B Hospitals Charity Care Distribution

Before 340B Cut Covered Entities Drug Makers Medicare Part B Sell at Pay at 22.5% 6% above below ASP ASP After 340B Cut Drug Makers Medicare Part B Sell at Pay at 22.5% 22.5% below below ASP ASP

Winners and Losers of 340B Cut v 1.35% average net benefit for all hospitals, 4.5% boost for for-profit hospitals v Hospitals that relied heavily on savings from 340B likely to experience net loss v Some hospitals may drop out of the program Ø Hospitals can appeal CMS

340B Cuts in California

Medicaid Drug Discount Programs 340B Drug Safety Pricing Net Program Hospitals 1992 Duplicate Drug Medicaid Discount Makers Patients 1990 State Medicaid Medicaid Drug Agency Rebate Program

To Limit Duplicate Discounts Drug Companies 340B Drug Medicaid Pricing Drug Rebate Program Program Carve In Carve Out Medicaid No central Exclusion File mechanism (MEF) for FFS for MCO claims

2018-19 State Proposed Budget v Effective July 1, 2019 v Eliminate any 340B entity from ”carving in” Medicaid beneficiaries, so that CA could lawfully collect rebates on ALL drugs reimbursed by Medicaid

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