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Steps in a 340B Rebate model
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As announced by drug maker Johnson & Johnson on 8/23/24
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NOTE: As of 9/5/24, J&J's policy applies only to DSH hospitals and two drugs. But it appears to be "the camel's nose under the tent"....
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StepChallengesNotes
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1Covered entity (CE) purchases a "package" of a medication at the regular price (generally the Wholesale Acquisition Cost, or WAC.)Cash flow -- rough estimates suggest CHCs would need to spend around 2.5 times more upfront to purchase drugs at regular prices compared to 340B prices.a. This policy applies to both in-house and contract pharmacies. b. Pharmacies purchase drugs in "packages", which contain a predetermined number of units; some packages contain enough units to fill many prescriptions, while others contain only one unit and therefore fill only one prescription. c. Very challenging for most CE staff to even see the net 340B price.
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2CE submits purchase data to rebate system (8 pieces of data required for each purchase)J&J is using a rebate processing system called Beacon.
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3CE dispenses (or administers) a unit of the drug to a 340B-eligible patient
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4CE submits data on the dispensed medication to the rebate systemFor each claim, the CE must submit 20 pieces of data -- 11 about the pharmacy claim, and 9 about the medical service that led to the prescription.All rebate data must be submitted within 45 days of dispense.
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5The rebate system reviews the claim for completeness, eligibility, etc.The manufacturer is in charge of determining which claims are eligible.
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6If the rebate system approves the claim, the CE is approved for a rebate equal to WAC minus the 340B price.This eliminates the potential for the CE to retain any sub-ceiling discounts (discounts below the 340B price that Apexus negotiates on behalf of all CEs.)
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7Rebate system waits until it has approved a "package size" of rebates for each drug, and then sends a rebate to the CE's bank account.For drugs puchased in large package sizes, this will further delay the rebate.J&J says "In general, we expect rebates will typically be paid 7 to 10 days after accumulation of validated rebate claims" - but there's no commitment to a timeframe, or penalties for missing it.
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8CE can choose to appeal the denial of a rebate
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