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The finalized 340B administrative dispute resolution (ADR) rule is set to go into effect on June 18 and will create a process to settle certain disputes between covered entities and drug manufacturers. But what should covered entities know about this process before it launches? Jason Reddish, a 340B expert with the Powers Pyles Sutter & Verville health care practice group, joins us to discuss.

How the ADR is intended to work

Jason notes that the ADR will use a panel of government officials to arbitrate certain types of disputes between covered entities and manufacturers. This process can allow covered entities to bring complaints against manufacturers for overcharging, and it can allow manufacturers to bring complaints against previously audited covered entities relating to allegations of diversion or duplicate discounts. The panel collects evidence from both sides and issues a binding decision in the dispute.

The pros and cons of the final rule

Jason says there are aspects of the final rule that are favorable to covered entities and some areas they might find lacking. The panels will be able to hear a wider range of complaints against drug companies, will have lower barriers to entry, and will avoid potential conflicts of interest in choosing their members. But they also will be able to take up to a year to issue decisions, will not be required to publish their findings, and will be able to hear certain controversial cases about alleged duplicate discounts.

Having offensive and defensive strategies

Jason recommends that covered entities be prepared for navigating the ADR process as both the filer of a complaint and as the subject of a complaint. Both parties must engage in good-faith efforts to resolve the dispute and drugmakers cannot file a complaint against a covered entity without conducting an approved audit first, so an ADR complaint should not come as a surprise to either party. Entities should consult legal counsel before making decisions related to any dispute.

Check out all of our episodes on the 340B Insight podcast website. You also can stay updated on all 340B Health news and information by visiting our homepage. If you have any questions you’d like us to cover in this podcast, email us at [email protected].

Resources:

1. Final Administrative Dispute Resolution (ADR) Rule Adopts Several 340B Health Recommendations
2. Report: 340B Hospitals Prescribe Medicare Part D Drugs to Greater Shares of Historically Underserved Patients