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  • Washington Highlights

    OMB Approves CMS Request to Collect 340B Drug Acquisition Costs


    Mary Mullaney, Director, Hospital Payment Policies

    The Office of Management and Budget (OMB) announced on April 23 that the Centers for Medicare and Medicaid Services (CMS) can begin collecting acquisition cost data for drugs acquired under the 340B Drug Pricing Program (340B Program).

    Hospitals enrolled in the 340B Program during the last quarter of 2018 and the first quarter of 2019 will be required to complete the survey. Critical Access Hospitals are exempt.

    CMS announced its intention to collect hospitals’ drug acquisition cost data for specified covered outpatient drugs (SCODs) purchased under the 340B Program in 2019. The AAMC expressed its concerns about the notice and urged CMS not to move forward with the collection process [see Washington Highlights, Dec. 5, 2019 and March 13].

    As part of the requirements of the Paperwork Reduction Act, OMB was required to issue a document identifier prior to CMS initiating the survey. OMB issued that identifier on April 24. CMS announced the survey will run from April 24 through May 15. OMB requests that CMS prepare an unbiased report showing its analysis of the information and share that report with OMB prior to utilization of the data for publications, including rulemaking. OMB notes that when CMS uses this data in publications and documents, it should clearly describe the scope and characteristics of the responding hospitals. CMS is only requesting acquisition cost data for SCODs acquired through the 340B Program. If hospitals acquire drugs through other means, those prices should not be included in the survey. The data should reflect the net acquisition cost for drugs acquired under the 340B Program for each applicable hospital.
    Acquisition cost refers to the price that hospitals pay upon receiving the product (that is, the subceiling price after all applicable discounts); this includes, but is not limited to, 340B drugs purchased via a replenishment model under the 340B Program or via penny pricing. Applicable discounts are any discounts below the discounted ceiling price.

    The 340B drug acquisition cost should be reported regardless of whether the drug was dispensed at all or the drug was dispensed in multiple settings. Acquisition costs for drugs acquired by 340B hospitals outside of the 340B Program should not be included on the survey. Reporting of the acquisition cost of the drugs acquired under the 340B Program should be for the specified timeframe only.
    CMS pledges to maintain confidentiality of individual responses that include acquisition cost for each SCOD to the extent provided by law. However, CMS may make public the average acquisition costs reported for each SCOD.