Apexus’ 340B Update

14th Annual NPPA Conference

Thursday, August 12, 2010

The MGM Grand, Las Vegas

John Barnes, C.P.M.Director, National Contracts340B Prime Vendor ProgramApexus Inc. Irving, Texas

Objectives

• Verbalize an overview (basic rules) of the 340B Drug Pricing Program  

• Define 340B expansion cited in health reform (PPACA)

• Explain the new 340B integrity provisions

• Describe the Prime Vendor Program’s strategic initiatives and interaction to health reform provisions

340B Program Administration

• The 340B Program Team:– HRSA’s Office of Pharmacy Affairs

– Pharmacy Services Support Center

(PSSC/PharmTA)

– 340B PVP Prime VendorProgram (Apexus Inc.)

340B Drug Program Overview

• Section 340B of the Public Health Service Act

• Provides discounts on outpatient drugs to certain safety-net covered entities

• Estimated six billion dollars in 340B drug purchases last year

• Manufacturers that participate in Medicaid must also participate in the 340B Program

Program Benefits

• The 340B Drug Program average savings of 25-50% on outpatient drug purchases for 340B covered entities on >20,000 NDC’s

• The 340B Prime Vendor offers additional savings of 15% on over 3,500 NDC’s

• Savings may be used to:— Reduce price of pharmaceuticals for patients— Expand services offered to patients— Provide services to more patient

Health Care Reform

• Affordable Care Act - P.L. 111-148 (signed into law on March 23, 2010)

— The expansion of and increase in access to the 340B Program (sec 7101)

• Health Care and Education Reconciliation Act of 2010 - P.L. 111-152 (signed into law on March 30, 2010)

— Exclusion of Orphan Drugs for certain Covered Entities (Sec 2302)

New Eligible Program Types

Covered Entity Type Code Statutory Definition

Critical Access Hospitals CAH 1820 (c)(2) of SSA

Rural Referral Centers RRC 1886(d)(5)(C)(i) of SSA

Sole Community Hospitals

SCH 1886(d)(5)(C)(iii) of SSA

Free Standing Cancer Hospitals

CAN 1886 (d)(1)(B)(v) of SSA

Children's Hospitals PED 1886 (d)(1)(B)(iii) of SSA

OPA website: www.HRSA.gov/OPA

Eligibility Requirements

• Verifiable designation/ Valid Medicare provider number

• A hospital must meet one of the following criteria:

i. is a private non-profit hospital under contract with state or local government; OR

ii. is owned or operated by a unit of state or local government; OR

iii. is a public or private non-profit corporation which is formally granted governmental powers by a unit of state or local government

Eligibility Criteria

• Eligible Disproportionate Share (DSH) adjustment percentage

— Must meet the proposed levels outlined in the legislation for the most recent cost reporting period

Does NOT apply to Critical Access Hospitals

• Group Purchasing Organization (GPO) Exclusion: (applicable to)

— Free Standing Cancer Hospitals

— Children’s Hospitals and all DSH

—

Summary of Criteria for Hospitals

Covered Entity Type Non profit/ Gvt. Contract

DSH % GPO Exclusion

Orphan Drug Rule

Critical Access Hospitals Yes No No Yes

Rural Referral Centers Yes ≥ 8% No Yes

Sole Community Hospitals Yes ≥ 8% No Yes

Free Standing Cancer Hosp.

Yes ≥ 11.75% Yes Yes

Children's Hospitals Yes ≥ 11.75% Yes Yes

Disproportionate Share Hospitals

Yes ≥ 11.75% Yes No

New Entity Enrollment

• Enrollment start date: August 2, 2010

• Rolling admission starting on August 2, 2010

• Please remember this will only be in effect for the first quarter of eligibility. Entities would then be eligible for participation on January 1, 2011.

DEADLINES- Completed application must be received 1

month before the start of the quarter

Program Prohibitions

• Diversion — Drug provided to individuals who are not patients— Drug dispensed in an area of a larger facility that is

an integral part of the eligible and participating entity (e.g. an inpatient service, a non-covered clinic)

• Duplicate Discounts— Accessing the 340B Discount + Medicaid Rebate on

same drug — Covered Entities must report Medicaid billing status— www.hrsa.gov/opa/medicaidexclusion.htm

Program Requirements

• Auditable Records— Covered entities must maintain auditable

records that demonstrate compliance with all Program requirements

— Subject to audit by the government or manufacturers

• Ongoing Eligibility— Covered entities must immediately notify

OPA in the event of any change in eligibility, location, operating status, and authorizing official/contacts.

Contract Pharmacy Services

• The Covered Entity purchases the drug, but “ship to bill to” procedure may be used.

• The Covered Entity retains legal title to all drugs purchased under 340B. The Covered Entity MUST pay for all 340B drugs.

• The contract pharmacy is subject to audits to identify and prevent diversion and/or duplicate discount.

New Integrity Provisions

• Covered entities to have access to verified list of 340B ceiling prices via OPA website (OPA/PVP)

• OPA to develop system to determine accurate pricing by auditing sales transactions and ensuring corrective action (OPA/PVP)

• Covered entities required to update contact information annually (OPA/PSSC)

• OPA to develop guidance on billing Medicaid (OPA/PSSC)

• OPA granted additional authorities to fine CE’s for intentional violations (OPA)

• OPA to develop procedure for manufactures to return overcharges to entities (OPA/PVP)

Health Center Expansion

• Three areas of focus - $11B over 5 years– Expands number of sites and locations

– Supports expanded health-care services

• Oral/dental & mental health

– Supports construction & renovation projects

– 19 million patients/year

– 1,100 grantees (FQHC) – 7,900 actual sites

Mission: Apexus leverages its unique purchasing power and expertise to deliver value which helps eligible health care and public service organizations to access unmatched savings and optimize performance

Strategic Initiatives 2010:

1.Increase Value to PVP Participants

2.Increase Participant Loyalty

3.Meet the Evolving Needs of HRSA4.Continuously Improve Wholesaler, Supplier, and Partnering Organization Relationships

Apexus – Strategic Initiatives

Summary of 2009 Accomplishments

• Re-awarded HRSA’s Prime Vendor Agreement

• 23% increase in participants

• Overall customer satisfaction improved to 85%

• Over $30 million in participant savings

• Lost savings/recovery = $1.3 million

• $3 million shareback in 2009; $4.5 million announced for 2010 (Over 1700 entities)

• Sub-ceiling priced pharmaceuticals covering 204 AHFS Therapeutic Classes (61%)

• Improved technical assistance via new tutorial and webinar offerings

• New on-line enrollment

Key PVP Contracts

• Abbott – Ultane, Simcor, Humira, Diabetic meters/strips

• Astellas – Lexiscan

• AstraZeneca – Crestor, Seroquel XR, Symbicort

• Bayer – Mirena, diabetic supplies

• Bedford – Injectables

• CSL Behring – Hemophilia Products

• Eisai – Aloxi, Dacogen

• GSK – vaccines, respiratory products, and Epzicom

• HDI – Diabetic supplies

• Lilly – Zyprexa, Cymbalta, Symbyax

• Merck – Vaccines and women’s health

• Pfizer - Protonix, Xyntha

• Sandoz – Injectables

• Sanofi – vaccines

• Teva – Injectables

• Sanofi – Vaccines

• Watson – multisource orals

Other Outpatient Rx Products and Services

• Vaccines – Hep A, Hep B, Flu (multiple sources)

• Split billing solutions

• Patient assistance program Software

• Auditing and overcharge recovery services

• Prescription vials/labels/printer cartridges

• Diabetic supplies – meters, strips and syringes

• Outpatient Rx technology and automation – ScriptPro, Automed, Innovation, VoiceTech, others

• Contract pharmacy solutions – SunRx

• Spend optimization/revenue recovery – Esi Inc.

• Apothecary supplies

• Reverse distribution (pharmacy returns)

2010 Apexus PVP Bids Bid (IFB) Number IFB Description Products

IFB3010 Bronchodilators for COPD Indication

Advair Diskus; Brovana; Foradil; Perforomist; Serevent Diskus; Spiriva HandiHaler; Symbicort

IFB3011 Immunomodulators for Multiple Sclerosis Indication

Tysabri; Rebif; Avonex; Extavia; Copaxone;

IFB3012 Bisphosphonates for Postmenopausal Indication

Actonel; Boniva; Fosamax; Reclast

IFB3013 Hematopoietic Agents – Erythropoiesis-stimulating Agents

Aranesp; Epogen; Procrit; Leukine

IFB3014 Hematopoietic Agents – Colony Stimulating Factors

Pegfilgrastim; Filgrastim

IFB3015 Hepatitis B (CMV) End-Organ Disease

Valcyte; Cytovene; Foscarnet; Vistide

IFB3016 Hepatitis C Tyzeka; Baraclude; Hepsera; Viread; Epivir HBV; Pegasys; Intron-A; Peg-Intron

IFB3017 Oral Contraceptives Monophasic; Monophasic Low; Monophasic Ultra Low; Biphasic; Multiphasic; Extended Cycle; Progestin Only; Injectable DMPA; Transdermal; Emergency

IFB3018 Heparin and Saline Flush Syringes Heparin vials and syringes; Saline vials and syringes

IFB3019 Glucagon-like Peptide Receptors Victoza; Byetta

IFB3020 Phosphodiestearase Type 5 inhibitors

Cialis; Lavitra; Viagra

IFB3021 Antibiotics – Fluoroquinolones Moxifloxacin (Avelox); Ciprofloxacin (Cipro); Levofloxacin (Levaquin); Ofloxacin

PVP Savings by Entity Type

Market Segment Secure Website

Optimize 340B Savings

– Best Buy by

Therapeutic Class

Report

– Best Buy by

Chemical Compound

– Best Buy for Over-

the-Counter

Medication

Drug price forecasts and other budgeting tools

Feedback Leading to New Reports and Service Offerings

• New reports on secure website (Q4, 2010)

• Expanded PVP portfolio on non-340B drugs

• Expanded PVP generics portfolio for DSH

• Reviewing solutions for Medicaid Carve-out

340B Related Information Resources

• Affordable Care Acthttp://www.healthreform.gov

• Medicaid Exclusionhttp://www.hrsa.gov/opa/medicaidexclusion.htm

• Children’s/Free Standing Cancer Hospitalshttp://www.hrsa.gov/opa/children.htm

• Orphan Drug listinghttp://www.accessdata.fda.gov/scripts/opdlisting/oopd

• Contract Pharmacyhttp://www.hrsa.gov/opa/contractpharmacy.htm

Contact InformationOffice of Pharmacy Affairs

Phone: 301-594-4353 or 1-800-628-6297Email: opastaff@hrsa.govWeb: www.hrsa.gov/opa

HRSA Pharmacy Services Support Center (APhA)Phone: 1-800-628-6297Email: lscholz@aphanet.orgWeb: http://pssc.aphanet.org

Prime Vendor Program (Apexus)Phone: 1-888-340-2787Email: chatwig@340bpvp.comWeb: http://www.340bpvp.com