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Get to Know 340B: Data Requests

 
Community health centers are good stewards of the 340B program and reinvest savings into patient care. Learn how data requests from drug manufacturers impact the program:
 
How do Medicaid and 340B interact?
Nationally, about 47% of community health center patients are covered by Medicaid.1  In Tennessee, 30% of health center patients are covered by TennCare, the state's Medicaid program.2  Medicaid and community health centers are both legally entitled to receive discounts on drugs dispensed to health center patients covered by Medicaid.3  
 
What are duplicate discounts?
Duplicate discounts occur when a drug manufacturer provides a medication at the 340B price to a health center and provides a rebate to the state for the same medication.4  The 340B statute explicitly prohibits duplicative discounts under Medicaid, and health centers must take steps to avoid duplicate discounts as part of 340B compliance.
 
Manufacturers are not legally restricted from providing a 340B discount and a discount to a Pharmacy Benefit Manger (PBM) for the same medication. Drug manufacturers and PBMs have increasingly co-opted the term “duplicate discount” to describe a situation in which medications purchased at the 340B price are also voluntarily discounted due to negotiations between drug manufacturers and PBMs.
 
What data are drug manufacturers requesting?
Several drug manufacturers, beginning with Merck and Sanofi, requested data from community health centers on 340B priced medications dispensed to patients with private insurance and Medicare. Under the 340B statute, health centers are not obligated to provide data on drugs dispensed to Medicare and privately insured patients.
 
How will drug manufacturers use data?
Drug manufacturers have stated they will use the data on medications dispensed to Medicare and privately insured patients in ways that will reduce the amount that manufacturers pay in voluntary discounts provided to Pharmacy Benefit Managers (PBMs). 
 
How are health centers affected by data requests?
If health centers did not provide the data requested, drug manufacturers threatened to restrict the shipment of 340B priced medications to contract pharmacies. Limiting the use of contract pharmacies will severely restrict or eliminate the ability of health centers to provide access to affordable medications to patients.
 
In addition to restrictions on the use of contract pharmacies, there would likely be accelerations in discriminatory reimbursement practices. If Pharmacy Benefit Managers (PBMs) are prevented from receiving discounts from manufacturers for 340B medications, PBMs may engage in discriminatory reimbursement practices with health centers, allowing them to retain 340B savings intended for health center. The PBM can essentially pay less for 340B medications to recoup the discounts they would no longer receive from drug manufacturers. 
 
What is the latest on data requests?
In May 2021, HHS sent letters to six drug manufacturers AstraZeneca, Eli Lilly, Novartis, Novo Nordisk, Sanofi and United Therapeutics warning of fines if the manufactures did not resume shipments of 340B priced medications to contract pharmacies. Many manufacturers have taken legal actions, and their cases are winding through the courts. 
 
Most recently, Merck announced in August 2021 it will halt shipments of 340B-priced medications to contract pharmacies as of September 1, unless the provider gives them data on all drugs dispensed under 340B. However, for the time being, these restrictions to do not apply to health centers or Look-Alikes. 
 
 
 
[1]  "National Health Center Program Uniform Data System (UDS) Awardee Data". 2021. Data.Hrsa.Gov. https://data.hrsa.gov/tools/data-reporting/program-data/national.
[2]  "Tennessee Health Center Program Uniform Data System (UDS) Data". 2021. Data.Hrsa.Gov. https://data.hrsa.gov/tools/data-reporting/program-data/state/TN.
[3]  NACHC, 2018. NACHC 340B Manual for Health Centers Second Edition.
[4]  Ibid.

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