Best Practices For Managing 340B Chargebacks

The Patient Protection and Affordable Care Act of 2010 (collectively “ACA”) has had sweeping ramifications for the healthcare pricing and reimbursement landscape impacting providers, payers, manufacturers, pharmacies and consumers. The ACA has deeply altered the Medicaid Drug Program including but, not limited to redefining Average Manufacturer Price, Federal Upper Limits and the rebate payment rates manufacturers pay to the States.

ACA also substantially modified the Public Health Service 340B Drug Pricing Program (340B). First, it substantially expanded the definition of Covered Entities (CE) so that many more providers can purchase drugs at the 340B price (effectively equivalent to the Medicaid price); a trend public healthcare policy advocates want to expand. Second, new program integrity provisions require manufacturers to address overcharging program participants. The upshot of both changes is the volume of 340B chargeback transactions has grown, and the financial and legal implications of price errors have become more hazardous.

This report will focus on operational and systems best practices and practical approaches for managing uncertainty and streamlining 340B program management from a manufacturer‟s perspective, and to a lesser extent channel service providers (i.e., Wholesalers, distributors and third party logistics).