Bass, Berry & Sims attorney Jeff Davis provided insight on the uncertainty facing safety-net providers as the industry awaits a ruling from the Health Resources and Services Administration (HRSA) about whether drug manufacturers can convert discounts offered through the existing 340B Drug Pricing Program into a rebate model approach. Several leading drug companies have filed suit challenging the HRSA’s previous stance that manufacturers cannot offer a rebate program without government approval. The lack of direction has left many safety-net providers in limbo as they plan financially and operationally for the coming months and years.
As a practical and financial matter, 340B providers would also need to rethink how they manage inventories of drugs obtained under 340B, Jeff told Modern Healthcare in the article. Currently, providers use a virtual system known as the replenishment model that utilizes retroactive claims data to track which patients received 340B-covered medications and resupply them as needed. Under a rebate system, providers may need to stockpile drugs on site, he added.
When asked about the fear that safety-net providers claim in the shift from a discount to rebate model will pose, Jeff said, “It’s right to point out the perfect storm here of: cut on cut on cut. From the provider perspective, it might have the same impact as what a cut would have, because of the increased cost that you’re going to have to carry and hope that you actually get the rebate paid. And of course, what if the manufacturer denies?”
The full article, “Providers Anxious as HRSA 340B Rebate Ruling Looms,” was published June 3 by Modern Healthcare and is available online (subscription required).