Posted by Adam Turteltaub

The 340B program was set up to providers of care to Medicaid patients to stretch federal dollars.  Hospitals and clinics are able to buy covered, outpatient drugs at a discounted price from manufacturers.

As usual, though, what sounds like a simple program poses compliance risks for manufacturers and front-line providers, explains Peggy Tighe (LinkedIn) and Mark Ogunsusi (LinkedIn) of the law firm Powers Pyles Sutter & Verville PC.

Providers can either pass the discounted price along to patients or dispense the drugs and get reimbursement from a private or federal payer at regular rates, using the difference to support their services.

While the 340B program is designed to be flexible, there are several strings attached.  Providers need to ensure that the drugs prescribed go to the patient.  In addition, the individual has to meet specific guidance as to what constitutes a patient.  Simply writing a prescription is not enough.  A set of criteria must be met, and those rules are strict enough that an entire category of software providers has emerged to manage this issue.

Other risks for providers to consider include virtual inventories and over purchasing 340B drugs

For drug manufacturers, it’s essential to ensure that price data is accurate, and that prices do not exceed the ceiling price.  A mistake could lead to civil monetary penalties and even termination from the program.  Duplicate discounts are also prohibited and pose another risk.

Listen in to learn more about how to avoid the many compliance challenges of 340B drug pricing programs.