Manufacturer Requests for 340B Information

By:  Butch David, RPh, 340B ACE -- CPS Solutions 340B Senior Consultant

This blog focuses on actions being requested by manufacturers related to duplicate discounts.

To begin, let’s reference a blog we published some time back as a result of a company and requests they made (and are still making) of Covered Entities (CE) pertaining to Medicaid Managed Care claims.  You can read about it [here]. As a summary, these companies email covered entities on behalf of manufacturers  and request audits of contract pharmacy prescriptions billed to Managed Medicaid agencies in their state. 

Now (summer of 2020) Merck and Sanofi have begun emailing CE’s with a similar request.  On July 20, 2020, 340B Health [LINK] published information on this topic, including a cropped copy of the letter from Merck [LINK].  Please use the link for the 340B Health articles, and if you are not a member, please consider becoming one (340B Health doesn’t even know my name, and they did not support this article).

What I feel it is important to know about the new Merck request, and I am sure the others that will follow from other manufacturers, is:

1.     Always engage your legal team before responding to any communication regarding 340B discounts. 
2.     Please, and I strongly urge you, please consider the amount of time that you voluntarily (I note voluntarily – read the 340B Health article) may be committing to.  I know of a few CE’s who began working with a company on this issue, and in time, the requests grew larger, more cumbersome and more time consuming.  There were even deadlines associated with their submission.
3.     Ask yourself who benefits from this activity, and who pays for it.
4.     Consider this paragraph from the manufacturer’s letter and get your legal team’s opinion on it as well.

   

But let’s say you are deeply concerned about the potential for a HRSA approved Manufacturer audit – read on and we’ll explain what you need to know.

A Manufacturer Wants to Audit You: Now What

HRSA provides guidance on dispute resolution.  IF a manufacturer feels a CE is not working with them “in good faith” to resolve a dispute, they may request that HRSA approve a manufacturer’s audit.  To do this, they are required to prove there is a ‘good cause’ for an audit.  This rule limits the possibility of capricious auditing, and this term could apply to the new spat of manufacturer requests.

If HRSA finds there is sufficient cause to grant a Manufacturer audit, the audit is approved.  The process is provided in detail on page 65410 of this document (click here).  In summary:

1.     The manufacturer and CE are notified of the audit (the CE can contact HRSA if you feel there is not cause to audit)
2.     The manufacturer submits a work plan which should include:
3.     Audit objectives
4.     Skill of auditors to assess the data
5.     Tests/Procedures to be used on the data
6.     Procedures to determine amounts under question
7.     Procedures used to protect PHI
8.     An independent auditing company, typically a national-level auditing firm, is selected.

From this point on, the process is similar to a HRSA integrity audit, only focused exclusively on that manufacturer’s drugs.  A final report is submitted, and if there are adverse findings, the CE will be required to submit a Corrective Action Plan (CAP).

Although there are no specific guidelines, historically HRSA limits the potential review period to no farther back than three years.

Summary

Take your time to consider your response to any request from anyone regarding your 340B program.  If the request does not come from Apexus/HRSA, then it may be considered voluntary.  So this is what you need to know – get your legal team involved, consider the amount of time for a voluntary audit for someone else, and who pays for the time and effort, as well as who gains from it.

Watch this blog site for more on this topic; I am sure we’ll be seeing growth in this area.