Payer/PBM Owned Specialty Pharmacies…The Next Frontier for 340B

340B eligible hospitals and health systems have realized that many of their patients are not allowed access to their specialty pharmacies, due to plan sponsors (employers/health plans/PBMs) having an exclusive arrangement with the plan sponsors’ specialty pharmacies. To resolve this issue, 340B covered entities are now partnering with the big PBM/payer-owned specialty pharmacies; in exchange, the 340B covered entity adds these specialty pharmacies as a contract pharmacy in their 340B network.

Due to the economic incentives provided to 340B covered entities to support underserved patients, specialty pharmacies within their 340B network stand to make more margin than they may from typical commercial plan reimbursements. The 340B covered entities obtain access to discounted specialty pharmaceuticals and increase pharmaceutical manufacturers’ exposure to 340B discounts. These arrangements have grown dramatically in the last three years.

While more commercial and Medicare Part D lives fall within the 340B program, pharmaceutical manufacturers are heavily discounting more medications AND paying formulary rebates.  This raises the question: how many commercial PBMs/payers are sending rebate claims for patients that are treated at pharmacies within the 340B covered entity network?  While most pharmaceutical manufacturer agreements require commercial payers to exclude 340B prescriptions from their rebate submissions, identifying these claims can be difficult.  If these claims are not identified correctly, pharma will be double dipped, providing discounted medications and paying rebates.

Pharmaceutical manufacturers’ 340B discounts are exploding.  The high cost of specialty drugs and the discounts required through the 340B program provide an incentive for the hospital, pharmacy, and PBM/payer to want more of these types of pharmacy claims.  As a result, pharmaceutical manufacturers are going to respond to declining revenue and specialty medication profitability by increasing prices on existing medications and factoring these increases into specialty medication launch prices.

The current NCPDP claim standard would allow PBMs and payers to require that the covered entity’s facility ID, prescriber’s NPI, and pharmacy’s NCPDP number be submitted during the claims adjudication process to triangulate whether a claim is associated with the 340B program. These same data elements should be included in the rebate claims submission files sent to pharmaceutical manufacturers.  Industry stakeholders should address the shortcomings of the 340B program to help ensure this program does not excessively enrich covered entities, pharmacies, and PBMs/payers, but rather supports patients who cannot afford adequate insurance coverage.

 

Posted: November 2019

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