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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 - - 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
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340B Program in a Nutshell
Sell at 22.5% below ASP Pay at 6% above ASP Deep discounts for all covered
- utpatient drugs
DSH, children’s hospitals, critical access hospitals, free standing cancer hospitals, sole community hospitals, rural referral centers Wants savings to go to enhanced services to vulnerable patients *ASP: Average Sales Price
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340B Proponents vs. Critics
340B hospitals use savings to increase profits and do not pass those savings on to patients 340B allows hospitals to stretch scarce resources to serve more low- income patients and communities
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340B Hospitals Charity Care Distribution
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Before 340B Cut
Sell at 22.5% below ASP
Drug Makers Covered Entities
Pay at 6% above ASP
Medicare Part B
Sell at 22.5% below ASP
Drug Makers
Pay at 22.5% below ASP
Medicare Part B
After 340B Cut
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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
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340B Cuts in California
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Medicaid Drug Discount Programs
Drug Makers Medicaid Drug Rebate Program 340B Drug Pricing Program Safety Net Hospitals State Medicaid Agency Medicaid Patients Duplicate Discount 1990 1992
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To Limit Duplicate Discounts
Drug Companies 340B Drug Pricing Program Carve In Medicaid Drug Rebate Program Medicaid Exclusion File (MEF) for FFS claims Carve Out No central mechanism for MCO
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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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