HRSA Releases 340B PPA Addendum
On November 1, 2016, Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA), released an Addendum to the current Pharmaceutical Pricing Agreement (PPA) for manufacturers participating in the 340B program. The Addendum, requested to be completed and signed by December 31, 2016, places additional price reporting and price availability requirements on manufacturers.
As part of the of the Affordable Care Act (ACA), provisions listed in Section 7102, amending section 340B of the PHS Act, required (1) a price validation system, maintained by HRSA, (2) manufacturers to report ceiling prices, and (3) manufacturers to make available to 340 covered entities, sub-ceiling pricing if offered to any non-covered entities. The price validation system would be used to verify the accuracy of manufacturer-submitted quarterly pricing data with ceiling price data calculated by the Secretary. The system would compare pricing from both sources and identify any discrepancies.
To support the price validation system, ensure that data is being fed into the system, and that it follows the ACA statutes, HRSA and OPA released the PPA Addendum. The Addendum adds two additional requirements to the PPA:
1. Manufacturers participating in the 340B program, with signed PPAs, to submit quarterly ceiling price reports for all covered outpatient drugs (COD) that are subject to the PPA.
2. Manufacturers are required to offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price if such drug is made available to any other purchaser at any price.
The exact mechanics of how or where to report ceiling pricing were not addressed in the Addendum. However, within the 340B Mega Rule, which is at OMB and is expected to be released later this month, Huron expects more specific ceiling price reporting guidance and sub-ceiling price availability conditions to be introduced.
In determining the full impact caused by the introduction of the two new PPA requirements, manufacturers should consider the following:
- Should manufacturers sign the new PPA before the actual 340B Mega Rule comes out, especially since it has been at OMB since September 1st and is expected to be released in November / early December?
- How will the availability of sub-ceiling prices to all covered entities affect drugs in limited distribution or limited supply systems?
- How will identified discrepancies between submitted prices and HRSA calculated prices be handled?
- Will historical pricing data need to be submitted?
As part of ensuring 340B program compliance, Huron encourages that all manufacturers, currently in a PPA, consult with trusted advisors to determine appropriate action. If choosing to sign the Addendum, navigate to the following link, complete and submit the requested Addendum form and stay patient for additional guidance from HRSA. In addition, HRSA is requesting that an Addendum be signed for each labeler code a manufacturer may have. The exact number manufacturers have on file can be determined by reviewing the “Signed Date”, for each labeler, as found on the 340B database. Manufacturers must complete a corresponding signed Addendum to each PPA and then those signed copies must be emailed to email@example.com by December 31st, 2016.
To obtain additional insights regarding the Addendum or the upcoming 340B Mega Rule, please contact our experts on the Huron Life Sciences team.Contact Us