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Three Pharmacy Regulations Health Execs Should Watch

By Karen Appold

Preparing for pharmacy policy changes can help your managed care organization stay ahead of the competition. Here, pharmacy experts highlight three areas to watch closely.

1. 340B
Through this federal program, which started in 1992, pharmaceutical companies participating in Medicaid agree to provide outpatient drugs to covered entities at significantly reduced prices. Hospitals and clinics that participate in the program must apply for eligibility and meet specific requirements, says John M. Lonie, RPh, EdD, associate professor of social and administrative sciences at Long Island University – College of Pharmacy in Brooklyn, NY. “The program enables covered entities to stretch federal resources and provide more comprehensive services.”

Over the past few years, the 340B program has grown because of policy changes that increased opportunities for purchasing drugs at discounted rates and because eligible entities became more aware of the program, says Emily Cook, MSPH, JD, partner, McDermott Will & Emery, an international law firm.

The program’s growth, however, has led to scrutiny from Congress, drug manufacturers, and other stakeholders. “Among the expressed concerns are that the program is not governed by clear rules, making it difficult to hold participating providers and drug manufacturers accountable for compliance with program requirements,” Cook says. For example, drugs purchased by providers through the 340B program cannot also be eligible for Medicaid discounts, and drug manufacturers must accurately calculate 340B prices. In addition, a lack of data reporting requirements makes it difficult to review and analyze purchases and use of drugs purchased at the discounted rates, she says.

Chris Hudson, managing director, Dacarba LLC, a professional services firm, points to recurring questions regarding the program’s eligibility rules and whether they are restrictive enough and concerns about the lack of transparency around how savings are used.

Cook expects a lot of legislative activity in the 340B space this year. Though no new legislation has been passed at press time, five bills have been introduced since mid-2017 and additional bills are coming, she says. To date, the bills have primarily focused on additional oversight and data reporting requirements for participating hospitals. Future bills will likely address which patients can receive discounted 340B drugs from eligible entities, the arrangements for dispensing drugs, and the prices that hospitals can charge patients for these drugs, she says.