• 340B Program created in 1992 as partnership among CMS, state Medicaid agencies and participating drug manufacturers to offset federal, and state costs of most outpatient prescription drugs.
  • Patient Protection and Affordable Care Act (PPACA) in 2010 leads to the GAO requesting that HRSA take steps to strengthen oversight of 340B Program participation and its compliance.
  • Annual recertification and attestation to compliance with all program requirements now mandatory for entity types
  • Finalized MegaGuidance expected in 2016

 

The 340B Program was created in 1992 under the Veteran’s Health Care Act and codified as Section 340B of the Public Health Service Act. This followed enactment of the Medicaid Drug Rebate Program, which is a partnership between the Centers for Medicare and Medicaid Services (CMS), state Medicaid agencies and participating drug manufacturers to offset federal, and state costs of most outpatient prescription drugs.

 

At the time of enactment, the 340B Program was intended by Congress to “enable covered entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”

 

The Health Resources and Services Administration (HRSA) is responsible for administering and overseeing the 340B Program through its Office of Pharmacy Affairs. This includes designing and implementing necessary policies and procedures according to federal standards to enforce agency objectives and to assess program risk. These policies and procedures include internal controls that provide reasonable assurance that the agency has effective and efficient operations and that Program participants are in compliance with applicable laws and regulations.

 

With passage of the Patient Protection and Affordable Care Act (PPACA) in 2010, several changes were required for the 340B Program. Among these was a mandate that the Government Accountability Office (GAO) address questions related to the 340B Program and make recommendations for improvement. The GAO also requested that HRSA take steps to strengthen oversight of 340B Program participation and its compliance.

 

The 340B Program provides eligible entities with an important benefit that comes with significant responsibility.  To ensure that both 340B covered entities and participating manufacturers are in compliance with program requirements, all entity types now are required to recertify annually, attesting to compliance with all program requirements.

 

The use of 340B drugs for covered entity employees, the number of contract pharmacies, and the definition of an eligible patient have all drawn recent scrutiny by both HRSA and vocal critics of the 340B Program. HRSA has recently published its long awaited MegaGuidance for public comment; a finalized version is expected in 2016. This could have significant implications for covered entities and utilization of the 340B program.