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1. Inventory Management in 340B Entities Douglas Wong, Pharm.D.Sr. Executive Consultant February 1, 2008
2. Disclosure Douglas Wong, Pharm.D.
Employee of Pharmacy Healthcare Solutions; Senior Executive Consultant
Pharmacy Healthcare Solutions is a wholly owned subsidiary of AmerisourceBergen Corporation
4. Inventory Management in the 340B Drug Discount Program?
5. Goals for Implementation Assure full compliance with the regulations and guidelines of the 340B program
Establish the operational procedures for an efficient process
Maximize the value of participating in the 340B program for the healthsystem and their patients
Most DSH will need to utilize 340B pricing within mixed (inpt/outpt) patient care settings
6. Requirements and Guidelines Requirements of the Entity
may not resell or transfer a 340B drug to a person who is not a patient of the entity
observe unique Medicaid billing procedures in order to protect manufacturers from having to offer both a 340B discount and a Medicaid rebate on the same drug (prevent duplicate discount).
limited in their use of group purchasing organizations (GPOs) or GPO-like
7. Requirements and Guidelines Guidelines for the Entity
must implement separate purchasing accounts (establishing 2 wholesaler accounts)
separate dispensing records to prevent diversion to ineligible patients
maintain adequate tracking systems for drugs dispensed to its patients.
entities offering excluded services must maintain a separate method for purchasing and dispensing drugs for those services
Subject to audit
8. Methods for Implementation Options in meeting program guidelines:
Separate physical inventories
Stock replacement system or virtual inventory management using:
In-house developed software
Commercial split billing software
Manual method for tracking and ordering
formulating 340B purchase orders based on historical
outpatient utilization in mixed settings
Allows single inventory that is replenished with 340B drugs to replace products that are dispensed to 340B eligible patients
9. Methods for Implementation Requirements to avoid diversion of 340B product:
Retrospective replenishment program
NDC to NDC match (11 digit match)
Reports/subject to audit
provide evidence that the quantity and identity of drugs bought through 340B matches the quantity and identity of drugs dispensed or administered to 340B-eligible patients
or the product is in the inventory of the hospital awaiting use by 340B-eligible patients
10. Methods for Implementation Concerns with replacement systems:
Reverse replenishment of 340b drug with non-340b drug is not allowed
What if NDC is discontinued or unavailable?
Drug is not a covered outpatient drug
Manufacturer fails to comply
Drug is in short supply
What if a generic equivalent is cheaper?
Ability to capture utilization when the patient is considered an outpatient
11. Vendors of Software Wholesaler Neutral
340BMGR (Integrated Informatics)
340B Replenishment Software (eAudit Solutions)
12. Vendors of Software Wholesaler Neutral
Speed Script (Digital Simplistics)
SUNRx Solution (SUNRx)
eRx Network (eRx Network)
e340B System (Global Pharmaceutical Solutions)
13. Vendors of Software Wholesaler Exclusive
Sentinel RCM and Sentrex (Sentry Data Systems - Cardinal)
McKesson 340B ManagerSM (McKesson)
MD 340B Split Bill (New Tech Computer Systems - Morris Dickson)
14. Steps for Implementation Data Management For each qualified area, determine the optimal method to capture utilization.
Create unique identifier (CDM or PIS) to NDC crosswalk
Match procurement information (NDC) to utilization data
Identify charge unit multipliers for billing units to vendor package sizes
Create reports to capture utilization
Validate functionality of selected system
15. Steps for Implementation Compliance Generate Policies and Procedures
Define the processes and responsibility
Maintenance of identifier-NDC crosswalk
Develop a Quality Assurance Program
Quarterly or semi-annual self audits
Re-assessment of the entity
16. Operationalizing 340B in the Health System Setting
17. Contact Information
Douglas Wong, Pharm.D.
Sr. Executive Consultant