Challenges of Limited Distribution Drugs in 340B Program

The federal 340B drug discount program remains an essential component to ensuring that safety-net hospitals have access to affordable medication, but this program has received unprecedented scrutiny from Congress and the drug industry in recent years. During a session on the 340B Drug Pricing Program at ASHP 2016 Summer Meetings & Exhibition, experts discussed limited distribution drugs (LDD)—a hot button issue of the program.

The Health Resources and Services Administration (HRSA) oversees the program that was created in 1992. In 2015, HRSA released its proposed 340B Drug Pricing Program Omnibus Guidance—or “mega-guidance”—in an effort to clarify some of the concerns that have been raised over the years. The final mega-guidance is expected to be published later this year.

“I can’t imagine a program more complicated than 340B in the pharmacy operations,” said Christopher A Hatwig, RPh, MS, FASHP, president, Apexus—the exclusive contractor for the 340B program. “I think HRSA need rule-making authority for this program otherwise it’s the Wild West. All stakeholders need better direction and more clear rules on how to engage the program because so many stakeholders are interfacing with the program.”

LDD is growing and is a continuing challenge for pharmacies, according to JoAnn Stubbings, BSPharm, MHCA, assistant director, specialty pharmacy services, University of Illinois Hospital and Health Sciences System (UI Health). “We found limited distribution is a distinguishing feature of specialty pharmacies and it has created a significant problem for us working in specialty pharmacy.”

She described the 3 types of limited distribution: (1) specialty wholesaler is distribution limited to one or more specialty wholesalers; 340B pricing is available but cost of goods discount is not available; (2) limited distribution is a select network of specialty pharmacies; 340B price may be available if covered entities are in the network; and (3) exclusive distribution is limited to one specialty pharmacy; no 340B price.

UI Health is addressing the challenges with limited distribution, she said, recommending that accredited health-system specialty pharmacies investigate the process for being part of the limited distribution network for specialty drugs.

“You need to continue to chip away at it and be tenacious,” to overcome LDD challenges, said Ross Thompson, MS, RPh, FASHP, executive director of pharmacy, Tufts Medical Center, Boston, MA. He said that the medical center faced many hurdles when trying to unlock some of the barriers pertaining to insurance restrictions (eg, working with payers to get prior authorization) and being recognized as a specialty provider by their insurers. “It is now a matter of sustaining the services we provide and continuing to work on payer lockouts and pharma lockouts as we roll out the services across specialty clinics.”

Gerald Buller, DPh, director, specialty pharmacy services, Vanderbilt University Medical Center, Lebanon, TN, emphasized the importance of capturing special pharmacy data and reporting and utilizing the data. He said any shortfalls in this capability will jeopardize an institutions’ ability to secure access to LDD, obtain payer contracts, achieve URAC accreditation, and a join a specialty pharmacy network.—Eileen Koutnik-Fotopoulos