The Draft Guidance is highly problematic for 340B covered entities and contract pharmacies. The sign-on letter, in our view, does a good job in both highlighting the relevant problems and proposing reasonable solutions.

The IRA will result in a negotiated discount price, called the called the “maximum fair price” or MFP, for 10 Medicare Part D drugs beginning in 2026. Manufacturers must ensure that pharmacies receive access to the MFP within 14 days of dispensing a negotiation-eligible drug to a Medicare Part D beneficiary. The timing is important because Part D plans will only reimburse the pharmacy the MFP for the drug (resulting in a breakeven for the pharmacy – MFP (or 340B if 340B is less) is the drug purchase price and MFP is the reimbursement). Manufacturers also must ensure that we get the lower of the 340B price or the MFP.

CMS is trying to avoid any 340B responsibility. Without going into excruciating detail, for drugs with a lower 340B price than MFP CMS’s proposal would require us to either use a point of sale modifier to indicate which claims involve 340B drugs (in both in-house or contract pharmacy settings) or rely on some undefined process to share 340B utilization data with manufacturers (on a manufacturer-by-manufacturer basis, using whatever rules they develop) to get credit for the difference between the MFP and the (lower) 340B ceiling price. For non-340B drugs, manufacturers will issue a standard credit amount (difference between WAC and MFP).

For drugs with a lower MFP than 340B price, CMS’s proposal would effectively require us to carve out, which is highly disruptive for closed pharmacies that have only a 340B inventory.

340B Health’s comments oppose that approach and demand a method that does not require identification of a 340B drug at the point of sale. 340B Health suggests using the Medicare Transaction Facilitator (MTF) as a clearinghouse that accepts retrospective 340B claim identification:

• It should be the MTF, not manufacturers, that are responsible for protecting manufacturers from duplicate discounts, i.e., giving MFP refunds on 340B drugs. The MTF should remove the 340B claims from the data it gives to manufacturers as the way to avoid duplication. Manufacturers would only pay MFP rebates on the non-340B claims data furnished by the MTF when the 340B price is less than the MFP, and the difference between the 340B price and MFP when the 340B price is greater than the MFP. The MTF should operate in a way that ensures that manufacturers do not receive any claims information from covered entities and their contract pharmacies. Covered entities worry that manufacturers could use claims data for commercial and advocacy purposes.
• CMS should establish a retroactive claims identification process allowing covered entities to identify 340B claims. As currently written, the guidance gives manufacturers too much discretion not to pay MFP rebates to the dispensing entity by relying on algorithms and other questionable methodologies for identifying likely 340B claims. Manufacturers should only be able to rely on claims that have been affirmatively identified as 340B by the covered entity. Anything else is too speculative. Essentially covered entities and their third-party administrators would have a certain period of time (three days? a week?) for identifying and submitting to the MTF 340B Part D claims. 

340B Health invited RWC-340B to join them and any other organizations willing to sign onto its letter. We believe that 340B Health’s comments do a good job of stating the issue and providing solutions favorable to CEs.

Please let us know if you have any questions, and to read the letter, click below.

RWC-340B Signs Onto Joint Letter Providing Draft Guidance on the Inflation Reduction Act (IRA)