Overview of the 340B Drug Pricing Program

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Endnotes 1 According to the Health Resources and Services Administration’s interpretation of the 340B statute, CAHs, cancer hospitals, RRCs, and SCHs are prohibited from using orphan drugs under 340B when the drugs are used for the rare disease or condition for which they received an orphan designation (the orphan drug exclusion). Because claims data do not identify the indication for which a drug was used, we could not determine whether an orphan drug used by one of these hospitals was eligible for 340B discounted prices. Therefore, we excluded all orphan drugs used by these types of hospitals. 2 When the sequester began in April 2013, it reduced the amount that Medicare paid for all services by 2 percent. For separately payable drugs in the OPPS, Medicare normally pays 80 percent of 1.06 × ASP, but the sequester reduces this to 80 percent of 1.039 × ASP. At the same time, Medicare beneficiaries are responsible for 20 percent of 1.06 × ASP, and the sequester has no effect on the beneficiary’s portion of the payment. The net effect of the sequester is to reduce the combined payment from Medicare and beneficiaries for separately payable drugs in the OPPS from 106 percent of ASP to 104.3 percent of ASP. For OPPS-covered drugs provided after the start of the sequester, we divided Medicare payments by 1.043 (rather than 1.06) to estimate the hospital acquisition cost. Overview of the 340B Drug Pricing Program | May 2015 29
References Office of Inspector General, Department of Health and Human Services. 2013. Comparison of average sales prices and average manufacturer prices: An overview of 2011. OEI–03–12–00670. Washington, DC: OIG. 30 Overview of the 340B Drug Pricing Program | May 2015
Page 1 and 2: M a y 2 0 1 5 Report to the Congres
Page 4: Acknowledgments The Commission bene
Page 8 and 9: Executive summary The 340B Drug Pri
Page 10: Overview of the 340B Drug Pricing P
Page 13 and 14: Several types of providers are elig
Page 15 and 16: Formula for calculating 340B ceilin
Page 17 and 18: HRSA’s current guidance, released
Page 19 and 20: Figure 1 FIGURE X Title here The nu
Page 21 and 22: Figure 3 FIGURE X Medicare spending
Page 23 and 24: Medicare spending for outpatient ch
Page 25 and 26: (Health Resources and Services Admi
Page 27 and 28: Endnotes 1 Although there are no re
Page 29 and 30: 19 This study excluded physician-ad
Page 31 and 32: References Apexus. 2014. 340B Unive
Page 33 and 34: IMS Institute for Healthcare Inform
Page 36 and 37: The 340B ceiling prices represent t
Page 40 and 41: About MedPAC
Page 42 and 43: Commission members Glenn M. Hackbar
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Overview of the 340B Drug Pricing Program

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