December 2016 - Office of Pharmacy Affairs Update

December 2016

MANUFACTURER UPDATE:

As part of its oversight of the 340B Drug Pricing Program (340B Program), the Health Resources and Services Administration (HRSA), Office of Pharmacy Affairs (OPA), is requiring each participating manufacturer to sign and submit a Pharmaceutical Pricing Agreement (PPA) Addendum. 

Why is HRSA OPA reaching out to manufacturers to submit a PPA Addendum?

Section 340B(a)(1) of the Public Health Service Act (PHS Act) provides that the Secretary of Health and Human Services (the Secretary) will enter into a pharmaceutical pricing agreement (the Agreement) with each Manufacturer of covered outpatient drugs in which the Manufacturer agrees to charge a price for covered outpatient drugs that will not exceed the average Manufacturer price decreased by a rebate percentage.  Section 7102(b) of the Affordable Care Act amended section 340B(a)(1) of the PHS Act to add two new requirements for inclusion in the Agreement with the Manufacturer:

1. The Agreement “shall require that the Manufacturer furnish the Secretary with reports, on a quarterly basis, of the price for each covered outpatient drug subject to the agreement that, according to the Manufacturer, represents the maximum price that covered entities may permissibly be required to pay for the drug”; and
2. The Agreement “shall require that the Manufacturer offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price if such drug is made available to any other purchaser at any price.”

These two new requirements were added as an Addendum to the originally signed Pharmaceutical Pricing Agreement, PPA (the “Agreement”), between the Secretary and the Manufacturer. 

Manufacturers will submit a PPA Addendum for each PPA it had previously submitted to HRSA OPA.  HRSA OPA understands that since the time the original PPA was signed, labeler codes may have been transferred, acquired or purchased by other manufacturers. 

The method for assessing the number of PPA Addenda a manufacturer is required to sign is outlined below:

• Refer to the 340B database at https://opanet.hrsa.gov/OPA/Manufacturers.aspx. 
• By searching the manufacturer’s Name field, a Manufacturer can see, based upon their name, how many labeler codes are listed for that specific manufacturer.
• For each labeler code there is a “Signed Date” field. 
• The number of “Signed Date” fields determines the number of PPA Addenda required.  Example:  XYZ manufacturer performs a search by their name XYZ.  Ten labeler codes appear under the name XYZ.  Under the “Signed Date” field there are three separate dates representing the ten labeler codes 1/05/1993, 1/6/2005, and 12/15/2012.  This denotes the number of original PPAs HRSA OPA has received from this manufacturer. HRSA OPA will then require receipt of three separate PPA Addendums to coincide with the original three PPAs. 

 Manufacturers are required to submit the PPA Addendum acknowledging the new requirements for participation in the 340B Program.  As part of HRSA’s oversight of the 340B Program, this PPA Addendum will help to ensure that the requirements of the statute are met.  The PPA Addendum, once implemented, will serve as a separately signed document that does not impact the validity of the existing PPA Agreement between the Secretary and Manufacturers.  Once a manufacturer determines the number of PPA Addenda to be signed, please refer to the attached instructions and PPA Addendum for further information. The PPA Addendum may be filled out, signed, scanned, and submitted to 340bpricing@hrsa.gov. If a manufacturer would like to receive an original signed copy, the manufacturer should send two signed PPA Addenda to the address listed below, and OPA will return a signed copy:

            Health Resources and Services Administration

            Office of Pharmacy Affairs

            5600 Fishers Lane, 8W03A

            Rockville, MD 20857

HRSA OPA requests receipt of the required PPA Addenda by December 31, 2016.

Please send any questions to the 340B Prime Vendor Program at 1-888-340-2787, or by sending an e-mail to ApexusAnswers@340bpvp.com.

If a manufacturer needs to update its information on the 340B database, this can be done using a Manufacturer Change Request Form.