ACE ACE Financial Management & Duplicate Discount Prevention 1 — Questions and Answers
Question 1: How is the 340B ceiling price for a drug generally calculated?
- Average Wholesale Price (AWP) minus 15%
- Average Manufacturer Price (AMP) minus the Unit Rebate Amount (URA) (Correct answer)
- Wholesale Acquisition Cost (WAC) plus a 5% handling fee
- Best Price divided by two
Correct answer: Average Manufacturer Price (AMP) minus the Unit Rebate Amount (URA)
The 340B ceiling price equals the Average Manufacturer Price (AMP) minus the Unit Rebate Amount (URA), aligning it with the Medicaid rebate calculation.
Question 2: What is the primary financial benefit that 340B covered entities derive from the program?
- Federal grants deposited directly into the entity's operating account
- The ability to purchase outpatient drugs at significantly discounted prices, generating savings (Correct answer)
- Exemption from state pharmacy licensing fees
- Priority access to Medicare Part D formularies
Correct answer: The ability to purchase outpatient drugs at significantly discounted prices, generating savings
The core financial benefit is the ability to purchase covered outpatient drugs at 340B ceiling prices, which are substantially below market prices, generating savings the entity can reinvest.
Question 3: According to the 340B statute, how should savings generated by the program be used?
- Transferred to the federal government as a tax payment
- Paid as bonuses to the covered entity's executive leadership
- Reinvested to expand services and reduce costs for vulnerable and underserved patients (Correct answer)
- Deposited into a restricted reserve fund inaccessible for five years
Correct answer: Reinvested to expand services and reduce costs for vulnerable and underserved patients
The 340B program's intent is for savings to be reinvested into expanding services, reducing drug costs, and improving care for underserved and low-income patients.
Question 4: What financial metric is most commonly used by covered entities to demonstrate the value of their 340B program?
- Total number of prescriptions filled per year
- 340B savings (the difference between acquisition cost and reimbursement or market price) (Correct answer)
- The entity's overall operating margin
- Number of contract pharmacy locations registered
Correct answer: 340B savings (the difference between acquisition cost and reimbursement or market price)
340B savings — calculated as the spread between the discounted 340B acquisition cost and the reimbursement or market price — is the primary metric used to quantify program financial value.
Question 5: What is the role of the Office of Pharmacy Affairs (OPA) in relation to 340B ceiling prices?
- OPA sets retail drug prices for all US pharmacies
- OPA oversees the 340B program and maintains the ceiling price database accessible to covered entities (Correct answer)
- OPA negotiates drug prices directly with foreign governments
- OPA manages Medicare Part B reimbursement rates
Correct answer: OPA oversees the 340B program and maintains the ceiling price database accessible to covered entities
The Office of Pharmacy Affairs (OPA), a division of HRSA, administers the 340B program and provides covered entities access to the ceiling price database to verify they are not overcharged.
Question 6: If a manufacturer charges a covered entity more than the 340B ceiling price, what recourse does the entity have?
- File a complaint with the FDA's Center for Drug Evaluation and Research
- Submit a dispute through the HRSA Administrative Dispute Resolution (ADR) process (Correct answer)
- Sue the manufacturer in federal district court directly
- Request a price adjustment from the wholesaler only
Correct answer: Submit a dispute through the HRSA Administrative Dispute Resolution (ADR) process
Covered entities that are overcharged above the 340B ceiling price may seek relief through HRSA's Administrative Dispute Resolution (ADR) process.
ACE ACE Financial Management & Duplicate Discount Prevention 1
How is the 340B ceiling price for a drug generally calculated?