Bass, Berry & Sims attorney Jeff Davis outlined concerns related to the newly proposed 340B rebate pilot program; his insights were included in articles published by Modern Healthcare and hfma. During the past year, several drug manufacturers had proposed providing discounted drug prices through the 340B program via rebates instead of upfront discounts. Providers participating in the 340B program have expressed concern about the financial and operational impact of 340B rebate models. The Health Resources and Services Administration (HRSA) recently proposed a tailored pilot program that applies to only a select number of drugs and includes several stipulations.
One of the requirements in the pilot program is that manufacturers must pay rebates within 10 calendar days of a request. While this is helpful to providers, said Jeff in the hfma article, the timetable does not address “a fundamental issue with the rebates, which is [that] you might buy a drug at WAC [the wholesale acquisition cost] and it might sit on your shelf for months before you dispense it and submit the rebate request. And so, you’re still going to have to float those WAC costs for that period of time.”
One other question is whether HRSA will continue to be in charge of the 340B Drug Pricing Program. The Trump administration has proposed moving the administration of the program from HRSA to the Centers for Medicare & Medicaid Services (CMS). “CMS is an agency that administers the Medicare and Medicaid program,” Jeff told hfma. “They have a duty to ensure that those programs are sustainable from a financial perspective. And certain policies that may be in the best interest of Medicare and Medicaid may not be in the best interest of 340B and vice versa.”
When asked about the response from providers to the 340B Rebate Pilot Program, Jeff told Modern Healthcare “It appears as though this is an effort by [the Health and Human Services Department] to strike a balance. From a provider perspective, we think there are better ways to do this that can strike that balance without increasing provider costs, but that appears to be the goal.”
The full articles are linked below:
- “340B Rebate Models Arrive in the Form of a New Pilot Program,” hfma (August 4)
- “340B Rebate Pilot Tees Up Healthcare Industry Firestorm,” Modern Healthcare (August 11)