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Drug Manufacturers Participating in 340B Program Must Execute New Pricing Agreement Addendum

Recently, the Health Resources and Services Administration (HRSA) released a new addendum to amend the existing Pharmaceutical Pricing Agreements (PPA) that drug manufacturers participating in the 340B Drug Pricing Program (340B Program) must have in place with the Secretary of Health and Human Services (HHS).

The purpose of the addendum is to incorporate language mandated by Section 7102(b) of the Affordable Care Act (ACA), which requires participating drug manufacturers to submit quarterly reports of 340 Ceiling Prices of covered outpatient drugs to HHS. The addendum adds a representation, also mandated by Section 7102(b) of the ACA, that the manufacturer will offer its covered outpatient drugs to 340B covered entities at or below the reported 340B Ceiling Price. 

The specific language that must be incorporated into the manufacturer’s existing PPA per the addendum is as follows:

  1. Manufacturer shall furnish the Secretary with reports, on a quarterly basis, that include the price of each covered outpatient drug that is 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 (referred to in this addendum as the “ceiling price”).
  2. Manufacturer shall 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.

In its “General Instructions for Completing the 340B Drug Pricing Program Pharmaceutical Pricing Agreement – Addendum,” HRSA explains that the addendum is necessary for the implementation of a “340B ceiling price validation system,” as required by the ACA, which will allow HRSA to receive data directly from manufacturers and identify pricing issues. The addendum must be signed by a corporate officer and submitted to the Office of Pharmacy Affairs (OPA). Although there is no “due date” or timeframe for submission listed in the General Instructions, we understand that the addendum should be returned to OPA by December 31, 2016.


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