On Wednesday May 9th, I was floored when the Administration released the Spring 2018 Unified Agenda of Regulatory and Deregulatory Actions, which contained this nugget: by December 2018, HRSA will publish its 340B Omnibus Guidance. Readers of our blog know that, as we predicted, this so-called Mega-Guidance was withdrawn in January 2017 without ever seeing the light of day. Within a day, the Unified Agenda was reposted with references to the so-called 340B Mega-Guidance removed, and HRSA acknowledged that its inclusion in the Unified Agenda was an error. The 340B Guidance remains shelved.  Continue Reading Last Week in 340B: the Revival [not] of the 340B Mega-Guidance, Another Senate Hearing, and the Trump Blueprint to Lower Drug Prices

There are now multiple proposals in the House and Senate for substantive changes to the 340B Drug Discount Program. The odds of a legislative “fix” to 340B are increasing. But independent of congressional action, is CMS signaling that additional changes to 340B may be coming?

The most significant recent change to 340B came courtesy of CMS, not HRSA. Effective January 2018, CMS, relying on its authority over the Medicare Hospital Outpatient Prospective Payment System (OPPS), effectively cut Medicare Part B reimbursement for 340B drugs in the hospital outpatient setting by almost 30%.  Most hospital and ambulatory surgical center reimbursement for Medicare Part B 340B drugs went from the standard ASP plus 6%, down to ASP minus 22%. Accompanying the new OPPS rule, CMS issued Frequently Asked Questions (FAQs), discussing the mandatory use of modifiers when billing 340B drugs under the OPPS.  While the OPPS rule implementing the payment reduction is the subject of ongoing litigation, to date the Medicare Part B payment reduction remains in full force and effect.  Continue Reading Will CMS Drive Further Changes to 340B?

Mintz Levin and ML Strategies will host the 3rd Annual Pharmacy & Pharmaceutical Industry Summit on May 8, 2018!  This year’s summit will take place in Boston and we are thrilled to announce that Massachusetts Governor Charlie Baker will be the keynote speaker.  The Summit brings together stakeholders and thought leaders to discuss current hot topics facing manufacturers, PBMs, payors, pharmacies, and other providers.  This year’s Summit will include sessions on:

  • The evolving drug supply chain – distruptor models and the Amazon effect
  • Addressing drug pricing and supply chain economics – government investigations and ERISA litigation
  • The uncertain state of the 340B program
  • Government enforcement targeting financial relationships
  • Combatting the opioid crisis

For additional information on the Summit, including the full agenda and registration information, please visit our event website.

In January 2018, in the wake of the publication of the House Energy and Commerce Committee’s Review of the 340B Drug Discount Program, I wrote that it was too soon to know whether 2018 will be a game-changing year for the 340B Program. In sum, there were just too many moving parts to discern whether there was a path forward for legislative change.

Multiple bills are now on file proposing substantive changes to the 340B Program. And the Senate Committee on Health, Education, Labor & Pensions (HELP) convened its first hearing on the 340B Program. There seems to be a rallying cry for “transparency” in the 340B Program.

So three months into the year, are things any clearer? Now may be a good time to take a step back and recap where we are and what the future may hold for 340B.  Continue Reading The Uncertain State of the 340B Program: Where Are We Now?

This week, the President’s FY 2019 budget will be released, and the Administration will spend the next couple of weeks touting its goals. How this activity is received in Congress will play out in various committee hearings, as will issues like drug pricing, which the Administration is closely examining.  On the regulatory side, is this the week that we finally see action on short-term limited duration insurance plans? We cover what that could mean and more in this week’s health care preview.

I previously said that the year 2014 may be a game-changer for the 340B Drug Discount Program. Increasing HRSA audits, a lawsuit over the 340B Orphan Drug Rule, and HRSA’s promise to issue a 340B mega-regulation, all pointed to major changes in how the 340B Program operates.  However, the HRSA audits had limited effect, the court invalidated the Orphan Drug Rule, and the reverberations of the Orphan Drug litigation killed the 340B mega-regulation.

January 2018 began with a new 340B reimbursement rule and new litigation over that rule posing a very real threat to how hospitals use 340B drugs.  Then Congress issued a formal Report on legislative and regulatory modifications needed in the 340B Program.  Will 2018 finally be the game-changing year for 340B? Continue Reading This Year May be a Game Changer for 340B Drug Discount Program, Take Two

Congress has its work cut out for itself between now and the end of the year. Between addressing the programs that constitute the Health Care Minibus, funding the government, and tax reform, there are also questions related to a market stabilization package (Alexander-Murray), the 340B program, the opioid epidemic, and another hurricane relief package. For the complete December preview, please click here.

On November 1, 2017, CMS announced that it is in fact cutting Medicare Part B reimbursement for 340B drugs to the tune of $1.6 billion.  To be accurate, what CMS announced is its intent to finalize proposed rule changes to the Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems Quality Reporting Program.  As part of the rule changes, CMS will be implementing, with minor tweaks, the proposal it first announced last summer to significantly reduce Medicare Part B reimbursement for 340B drugs paid to hospitals and ambulatory surgical centers.  The full text of the final rule with commentary is available now and will be published in the Federal Register on November 13th.   The reimbursement reduction, and other changes relative to 340B, are scheduled to go into effect on January 1, 2018.

The rule only impacts Medicare Part B reimbursement for 340B, and no other government or private payor reimbursement.  Still, the change will have major repercussions in the 340B world.  When the proposed rule was first announced, I posted answers to a myriad of questions about the proposal and its potential impact on 340B covered entities.  With the “rule” now in final form, I can revisit some of those questions and answers. Continue Reading CMS Finalizes Medicare Part B Reimbursement Cut for 340B – What Does it Mean?

Earlier this month the House Energy and Commerce Committee’s subcommittee on Government Oversight and Investigations held its second hearing on the 340B Drug Discount Program. The hearing followed on the heels of a July 18th hearing in which officials from the Health Resources and Services Administration (HRSA), the Government Accountability Office (GAO), and the Department of Health and Human Services Office of Inspector General (HHS-OIG) testified about the challenges faced in overseeing the 340B Program.

This hearing was called Examining How Covered Entities Utilize the 340B Drug Pricing Program.  Representatives of five different covered entities were asked to address three questions in their testimony:

  • How much do 340B Covered Entities save when purchasing 340B drugs?
  • How are those savings tracked?
  • How are those savings used?

However, it was the follow-up questions from subcommittee and committee members that may indicate where Congress is headed in legislating changes to the 340B Program. Continue Reading Six Key Follow-Up Questions Asked by Congress in 340B Hearing

On August 17, 2017, the U.S. Department of Justice (DOJ) announced that it had reached a $465 million false claims settlement with Mylan, the manufacturer of EpiPen, over the company’s alleged underpayment of Medicaid Drug Rebates for EpiPen. The settlement amount and terms were generally announced by Mylan in October 2016 – but back then DOJ refused to confirm the settlement.

Back in October 2016, we theorized that the announced “settlement” was likely a handshake deal, not yet reduced to writing and not signed off on by the necessary parties.  It’s not surprising that it would take ten months to finalize a health care false claims settlement.  In Ellyn’s government days, she worked cases that took years, not months, to get from handshake deal to announced settlement.

And in reviewing the EpiPen settlement and related unsealed documents, there were things we expected to see in the settlement; admittedly we are grizzled veterans when it comes to false claims settlements.  But there were some things about this settlement that raised our eyebrows. So we will (briefly) recap how we got here and the settlement terms, and discuss the four things that surprised us about this settlement.  Continue Reading The Four Things That Surprised Us in the EpiPen False Claims Settlement