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July 2012


A Polsinelli Shughart Update:

340B Drug Pricing Program Experiencing Unprecedented Compliance Scrutiny


Participants in the 340B Drug Pricing Program (340B Program) should be aware that over the last several months, the 340B Program has witnessed an unprecedented focus on oversight, integrity and enforcement. Although the 340B Program was enacted as part of the Veterans Health Care Act of 1992, its expansion of the types of providers that were made eligible in Patient Protection and Affordable Care Act of 2010 (ACA) has ignited recent scrutiny by Congress, federal government agencies and the pharmaceutical industry to verify participants' compliance with the 340B Program.

The 340B Program requires drug companies to give discounts on outpatient drugs to certain health care providers (Covered Entities) who serve patients who have little or no insurance coverage. From 2001 to 2011, the number of Covered Entities almost doubled, reaching slightly more than 16,500, and, under ACA, additional types of providers were made eligible further expanding the pool of providers to receive the drug discounts. Providers eligible to be Covered Entities under the 340B Program include federal grantees, federally-qualified health center look-alikes and qualified hospitals. [Read more ... ]

What Covered Entities Should Do Now

Participating Covered Entities should stay abreast of HRSA's increased program enforcement and be aware of the increasing oversight. Covered Entities should make sure to maintain auditable records available in case of a HRSA or manufacturer audit. Policies and procedures preventing diversion and duplicate discounting and describing implemented compliance safeguards should be reviewed and fine-tuned as required. Verification of Covered Entity eligibility and a review of contract pharmacy compliance is also encouraged. By effectively monitoring its 340B program while ensuring compliance with HRSA guidelines, a Covered Entity can take a proactive role in managing its 340B program in this heightened compliance environment.

For More Information

Click here to read this entire Alert. To learn more about any of these issues or the 340B Drug Pricing Program generally, please contact:

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