Check out this 340B pricing terminology:
340B ceiling price: calculated by the manufacturer using confidential pricing information; HRSA has developed a secure pricing database that validates and publishes 340B ceiling prices for access by authorized manufacturer and covered entity.
340B selling price: represents the price paid by a covered entity as communicated to the PVP by the supplier or distributor, which may not represent the 340B ceiling price as published by HRSA. The 340B ceiling price for a covered outpatient drug is equal to the average manufacturer price (AMP) from the preceding calendar quarter for the smallest unit of measure minus the unit rebate amount (URA), and is published by HRSA in the 340B OPAIS Pricing component.
PVP contracted price (i.e., sub-340B): this includes various contracts negotiated by the Prime Vendor that are not the 340B ceiling or selling prices. These prices are available on the PVP secure site for PVP participants.
Now, more than ever, it is important for 340B covered entities to implement strategies to comply with the 340B Drug Pricing Program and ensure that the entities can stretch their scarce resources to provide more care to more patients. As the 340B Prime Vendor, we are constantly making updates to our secure Prime Vendor Program (PVP) online portal to provide transparent information that PVP entities can use to optimize their drug purchasing decisions and reduce their outpatient drug costs. Whether you are a small grantee that is new to using analytics to make purchasing decisions, or a large academic medical center that has leveraged analytics but not specifically on 340B purchasing, free resources are available for you on the portal. Many tools are available for all provider types that help make it easier to implement a compliant program and produce reports without having to reinvent the wheel. Despite strong use of the portal, we still hear feedback that many users aren’t aware of the free purchasing and analytics tools provided by the Prime Vendor, or they don’t know how to use them to create value in their 340B program. We’re writing this blog to help change that.
ACTION ITEM: Include this tool as a part of your self-auditing process by developing a quarterly pricing spot check for high-cost medications (e.g., review the top 25 high-cost drugs’ 340B pricing).
Consider this: What if you were paying the wrong price for a 340B drug for months and never realized it? What if there was a way to spot-check whether the wrong price was loaded to your account all along?
Bad news: It could happen.
Good news: There is a way to catch and resolve it.
Following is a real example based on the experience of a PVP participant that shows one way that 340B PVP resources can be valuable.
A covered entity (CE) downloaded the PVP Contract Catalog and discovered that its wholesaler might have loaded a drug’s 340B selling price incorrectly. The CE used the NDC search on the PVP secure portal and realized that it should be receiving a sub-340B price—that is, a price that is even lower than the 340B price. The CE contacted the wholesaler, which confirmed the error and then corrected prior purchases and loaded the accurate price going forward. This price correction saved the CE thousands of dollars for that one quarter. The CE can also review 340B selling prices each quarter to ensure that it is receiving the correct prices. The PVP performs integrity checks and wholesaler audits to ensure that the contracted sub-340B pricing is being applied properly within the wholesalers’ ordering systems. These examples illustrate why the purchasing tools on the PVP online portal are so important.
The particular tool used in the preceding example is called the PVP Contract Catalog. This tool contains comprehensive PVP pricing information, such as the reported 340B selling price, sub-340B price (if applicable), contract term, and other data points. You can also search for the drug directly using the Search function to more quickly find this information for a specific drug product. The product information page lists the email address and phone number of the Apexus 340B Prime Vendor product manager for users to contact with specific questions regarding the contract.
This is just one of the many ways in which you can use the PVP purchasing tools. These tools are available to PVP participants and are accessed by logging into the secure PVP online portal. Let’s highlight two additional purchasing tools that should be routinely used by all PVP participants, based on common questions we receive through Apexus Answers:
“Our pharmacy wants to ensure that we’re purchasing 340B products with the best price to reduce our inventory costs. What is the best way to ensure that we are purchasing the most cost-effective products?”
This customized tool recommends alternative NDCs that would provide cost savings based on your actual purchases from the prior quarter. In other words, it suggests either generic and therapeutic equivalents or just generic equivalent products that you “could have bought” at a lower price and estimates your annualized savings by changing to the alternative NDC. Hospitals subject to the GPO Prohibition can also run this report for their non-GPO/WAC accounts.
ACTION ITEM: Review the top 20 drugs listed on this report every quarter to ensure that your pharmacy is purchasing the most cost-effective products.
“I’m auditing our top 25 most purchased drugs from last year and want to reference the 340B price from prior quarters. Is there a way to reference historical 340B prices by quarter?”
Yes. This tool will show up to 20 quarters of historical 340B selling prices for each NDC as reported from major distributors.
ACTION ITEM: Include this tool as a part of your self-auditing process by developing a quarterly pricing spot check for high-cost medications (i.e., review the top 25 highest-cost drugs with 340B pricing). This tool can also be used during the annual budgeting process to review historical trends in the 340B selling price of high-cost medications. It is important to note that 340B selling prices are subject to large price fluctuations and change quarterly, so historical trends may not always indicate future pricing.
To get started on these action items, ensure that you have a PVP login to the PVP secure website.
These are just a few of the tools available for PVP participants to help validate pricing and to ensure that they optimize their drug purchasing decisions and reduce their outpatient drug costs.
The PVP works with health care providers across the US to lower their costs for purchasing drugs and supplies covered by the 340B Drug Pricing Program.