POST OUTLINE
1) Our process for recovering savings lost to 340B ESP
- Introduction / Overview
- Brief history of 340B-related manufacturer restrictions
- List of manufacturers currently imposing restrictions
2) How VytlOne overcomes 340B ESP restrictions on 340B pricing
- Establishing communications protocols
- Ensuring 340B ESP restores prices on schedule
- Recommendations for further reading
- Ensuring 340B ESP restores prices, period
- Ensuring eligible dispense submissions result in 340B price access
- Ensuring compatibility between 340B ESP and your TPAs’ reports
- Dealing with 340B’s lack of help
3) Why there is still hope for dealing with 340B ESP
NEED HELP? For more 340B guidance and support:
Contact Howard Hall. C: 214.808.2700 | [email protected]
FULL POST
Our process for recovering savings lost to 340B ESP
As we’ve noted in multiple earlier blog posts, 340B ESP is a manufacturer-backed reporting platform that, as a condition of 340B pricing, places substantial new requirements on eligible entities. At the same time, a number of additional manufacturers impose their own reporting requirements, separate from 340B ESP, on hospitals submitting 340B claims.
A brief overview of 340B-related manufacturer restrictions.
The drug manufacturing industry first introduced 340B restrictions with the June 2020 launch of the 340B ESP website, an online portal operated by Second Sight Solutions, a privately owned company that works with drug manufacturers on 340B data reporting. HRSA has publicly questioned whether the platform’s operators can require covered entities to submit this data, and the underlying legal questions have been contested in court.
Merck was the first manufacturer to require, for all practical purposes, that eligible entities use 340B ESP, when it issued a letter “requesting” that 340B covered entities submit their contract-pharmacy claims data through the website.
Several other manufacturers soon adopted 340B ESP, or their own reporting requirements, to restrict 340B prescription discounts. At the latest count, 25 manufacturers were imposing restrictions, either through 340B ESP or independent of the website:
- AbbVie
- Amgen
- AstraZeneca
- Bausch
- Bayer
- Biogen
- Boehringer Ingelheim
- Bristol Myers Squibb
- Eli Lilly
- EMD Serono
- Exelixis
- Gilead
- GSK
- Jazz Pharmaceuticals
- Johnson & Johnson
- Mallinckrodt
- Merck
- Novartis
- Novo Nordisk
- Organon
- Pfizer
- Sanofi
- Teva
- UCB
- United
As of April 2023, of the 21 manufacturers then imposing restrictions, only nine had committed to one of the program’s core standards: letting covered entities designate and submit claims for an unlimited number of contract pharmacies. In other words, most had moved away from the program’s original intent, which was to let covered entities use multiple contract pharmacies.
Novartis takes a different approach from the manufacturers above. It places no additional data-submission requirements on 340B health systems. Instead, it limits 340B contract-pharmacy pricing to a single pharmacy within a 40-mile radius of a hospital’s campus. That radius matters, because few 340B specialty pharmacies are located within 40 miles of the health systems they serve.
Manufacturers’ 340B restrictions on specialty drugs
Manufacturers’ 340B restrictions have hit specialty pharmacy medications hardest, the drugs that are typically the most expensive in their product lines. As we noted in a previous post, because the average cost per prescription is much higher for specialty drugs, the savings potential of these 340B covered outpatient drugs can be substantial. According to a drug trend report by Evernorth, specialty drugs were used by less than 2% of the patient population in 2020 but accounted for more than 50% of prescription spending.
Seven manufacturers do not allow the 340B covered entities to provide claims data to expand pricing to additional contract pharmacies.
- AstraZeneca
- Boehringer Ingelheim
- Biogen
- Bristol Meyers Squibb
- Novartis
- Novo (will allow effective 1/1/23)
- UCB
It’s worth remembering why this matters. The 340B program was established by Congress to support nonprofit, community, and charitable hospitals and clinics, many of which operate at a loss, some with annual deficits in the tens of millions. The 340B revenue lost to 340B ESP and other manufacturer restrictions often affects eligible entities’ charitable prescription programs directly, which means the patients hurt most are often those who can least afford the medications they need.
How VytlOne overcomes 340B ESP restrictions on 340B-eligible savings.
As much as we’d love to report that we’ve found a magic bullet for getting past manufacturer barriers to 340B savings and revenue, we can’t. Working through these restrictions is complicated, and the process takes painstaking diligence, leaving no stone unturned so that no 340B savings are missed.
Our process starts with an in-depth assessment of a health system’s current 340B-program status (assuming the health system has an active 340B program). Once we’ve completed that analysis, we work with the health system’s 340B professionals to develop strategies for improvement in every area of its program, including 340B ESP data reporting, 340B price monitoring, tactics and resources for identifying matching data missed by its TPAs, and its contract-pharmacy partnerships. VytlOne’s 340B support team then implements software-supported processes for auditing missed opportunities. For most of the hospitals we serve, our team also provides hands-on support in managing their 340B programs.
The good news is that our process is producing results. VytlOne launched its 340B Support Services division in 2019. Since then, we’ve supported the 340B programs of more than 100 health systems and health centers, and generated over $1 billion in 340B savings and revenue for our clients, including $300 million in 2025 alone. Despite 340B ESP and other manufacturer restrictions, which have sharply reduced many hospitals’ 340B programs, every one of the health systems whose 340B programs we manage has seen significant 340B-revenue increases. Those results vary from system to system. One small rural hospital we serve has seen its monthly net savings rise more than 900% over its historical averages since manufacturer restrictions took effect.
Below are the seven key elements of our process.
1. Establish communications between health system providers and their retail and specialty pharmacies.
With manufacturer restrictions in place, it’s more important than ever that health systems have onsite pharmacies partnering with them to capture as many 340B-eligible prescriptions as possible, so that savings stay within the system and can be passed along to patients.
VytlOne manages and/or owns retail outpatient pharmacies on hospital campuses nationwide. At select 340B-eligible locations, our pharmacists make themselves available to system physicians and providers, serving as a resource to help them choose the best medications for patients in need that also qualify for 340B savings. When needed, our pharmacists can consult with VytlOne’s team of 340B experts for additional guidance.
Our 340B team is available to help guide clinical-practice decisions for all the hospitals whose 340B programs we manage. We’re always there to help providers select the best 340B-eligible medications in any class, so those savings can be passed along to patients in need. It’s a critically important service, given the research (and our first-hand experience) showing that when prescriptions are prohibitively expensive, patients often won’t fill them.
The VytlOne specialty pharmacy team is accredited by URAC (Utilization Review Accreditation Commission), the healthcare profession’s gold standard for third-party validation of high-quality care. VytlOne is the only accredited company that offers hospitals a comprehensive range of consultative and hands-on pharmacy support services. The greatest benefit URAC’s validation offers your health system is a significant reduction in the calendar time, and the personnel time, required to earn the accreditation you need to own a successful specialty pharmacy.
The first specialty pharmacy we helped build, fund, and open, for a large regional Southeastern 340B hospital, began generating a monthly net income of $1 million within six months of launch. More importantly, that pharmacy began improving the health system’s quality and scope of patient care months before it opened, and that improvement has grown since.
For Further Reading:
Why A 340B Hospital Should Own A Specialty Pharmacy. Why Not.
2. Upload only the 340B Data required by 340B ESP, and NO MORE.
As with every aspect of our program, we learned this lesson through experience: when working in the 340B ESP platform, you should never upload data the platform does not require.
We know how complicated 340B ESP’s requirements are, and how hard it is to determine the necessary minimum, especially given how difficult it is to find a complete, up-to-date list of the impacted National Drug Codes (NDCs, the identifier codes for drugs used by the FDA) required for reporting. That’s why we’ve developed a reliable process for scrubbing reports from the TPAs used by the health systems we serve before they’re submitted.
We submit NDCs only from manufacturers that make 340B pricing contingent on data reporting. Here’s why: under the website’s Terms of Use, Second Sight can use the non-required data you submit to encourage even more manufacturers to require data submission through 340B ESP.
3. Don’t rely on 340B ESP to restore prices on schedule.
340B ESP says health systems should expect a 10-day window, post-submission, for 340B prices to be restored in their contract pharmacies’ 340B wholesaler accounts. In reality, that rarely happens within 10 days, if at all.
That’s why VytlOne checks all NDCs, in all of our health systems’ contract-pharmacy 340B accounts, before instructing their TPAs to restart processing on any restricted NDCs. Because there are times when Wholesale Acquisition Costs (WAC) are loaded instead of 340B pricing, which leads to covered entities overpaying, TPAs began blocking processing when NDC restrictions were introduced.
There are more than 1,400 restricted NDCs, and for every contract pharmacy a covered entity has, each of those NDCs must be checked. That would be impossible without proprietary software built to do exactly that. VytlOne’s 340B Pro platform displays all the information from your EHR and from all of your TPAs in an easy-to-read dashboard, giving you actionable information for compliance, audits, missed data, and referrals. We rolled out the first version of 340B Pro in 2021, and we update it constantly to keep pace with the changes manufacturers make to their 340B pricing restrictions.
For Further Reading:
Overcome 340B Restrictions With Software And Human Insight
Optimize 340B Program Savings & Compliance With Data Mining
4. Don’t assume 340B ESP price restoration will be honored.
When dealing with 340B ESP, we’ve learned that health systems can’t assume any 340B price restorations will actually hold. Manufacturers working with 340B ESP sometimes decide, on their own, that the purchases made for a given contract pharmacy exceed its dispenses. When that happens, they refuse to pay the wholesaler’s chargeback, which results in a credit-rebill, and the covered entity ends up paying WAC, a much higher price.
5. Don’t assume that submitted eligible dispenses result in 340B price access.
Some manufacturers now require you to submit 340B purchase-data reports within 45 or 60 days of dispense, or they disallow the submission. In practice, that means covered entities may never capture many of the 340B prices they’re entitled to. Although VytlOne mines clients’ 340B-submission records for eligible prescriptions their TPAs missed, the window is tight under these arbitrary, restrictive manufacturer requirements, and so far we haven’t found a workaround for them.
6. Don’t assume 340B ESP will be compatible with your TPAs’ reports.
If you think you can simply pull reports from your TPAs and upload them when submitting to 340B ESP, think again. Most TPA reports need significant modification first. Your uploads have to follow 340B ESP’s exacting format, and every upload carries the potential for errors that cause failures.
Some TPA systems make it impossible to pull submission data at all, because they require 340B prices to be available before they’ll consider dispenses for matching. Without 340B pricing, reports from those TPAs won’t produce data you can submit. It’s a frustrating, circular problem: no price means no data, which means no price. Taken together, these requirements create real barriers for the covered entities the 340B law was created to serve.
7. Support through 340B ESP is limited.
On the 340B ESP home page, in the top left corner, you’ll find a support email address, [email protected]. In our experience, it rarely helps. Neither 340B ESP nor the manufacturers have stepped in when our clients didn’t receive the 340B prices they were entitled to, even months after a data submission.
There’s still hope for covered entities dealing with 340B ESP
Despite the barriers manufacturers have put in place, VytlOne’s 340B team continues to optimize savings and revenue for the hospitals we serve. With our experience, we’re well positioned to handle whatever new challenges come next.
There’s also another way to reduce 340B restrictions on specialty drugs. To learn more, see Partnering With Manufacturers To Overcome 340B Specialty Drug Restrictions.
VytlOne can help you overcome 340B price restrictions
There are many ways to optimize your 340B drug program savings and benefits while reducing the likelihood of noncompliance. For more information, contact Howard Hall. C: 214.808.2700 | [email protected]