FinalRevised0327Supporting Statement A

Supporting Statement A

Enrollment and Re-Certification of Entities in the 340B Drug Pricing Program and Collection of Manufacturer Data to Verify 340B Drug Pricing Program Ceiling Price Calculations

OMB Control No. 0915-0327

Terms of Clearance: For revisions

1. Justification

1. Circumstances Making the Collection of Information Necessary

The Health Resources and Services Administration (HRSA) currently has approval under Office of Management and Budget (OMB) Control No. 0915-0327, to collect information in support of 340B covered entity recertification and registration, as well as registration of contract pharmacy arrangements and the pharmaceutical pricing agreement. HRSA is requesting comments on an additional information collection in response to the pricing verification requirements mandated by the provisions in the Affordable Care Act.

The Affordable Care Act introduced a number of program integrity-related pricing requirements. This enhancement will afford HRSA the opportunity to implement the statutory requirements. More specifically, the Act requires:

(i) The development of a system to enable the Secretary to verify the accuracy of ceiling prices calculated by manufacturers under subsection (a)(1) and charged to covered entities, which shall include the following […] Comparing regularly the ceiling prices calculated by the Secretary with the quarterly pricing data that is reported by manufacturers to the Secretary.

[...]

(iii) The provision of access through the Internet website of the Department of Health and Human Services to the applicable ceiling prices for covered outpatient drugs as calculated and verified by the Secretary in accordance with this section, in a manner (such as through the use of password protection) that limits such access to covered entities and adequately assures security and protection of privileged pricing data from unauthorized re-disclosure.

The price verification computer system will allow HRSA to verify and adjudicate prices for approximately 40,000 unique national drug codes (NDCs). Without the use of technology, HRSA will not be able to meet the aforementioned mandate. The respondents are already required to calculate the statutorily defined 340B ceiling price and must use the requested variables in this information collection request (ICR) to arrive at that price, so that 340B covered entities are not overcharged.

HRSA is also requesting renewal of the existing currently approved registration and recertification forms that are mandated under Section 340B of the Public Health Service Act (PHSA) for covered entity compliance; changes from the existing versions of these forms are primarily related to the transition from hardcopies to their online equivalents. (HRSA previously maintained separate hospital registration forms with type-specific references to statutory eligibility provisions; the registration database currently inserts appropriate language based on the hospital type selected by the user.)

2. Purpose and Use of Information Collection

HRSA’s Office of Pharmacy Affairs (OPA) has previously obtained approval for information collections in support of 340B covered entity recertification and registration, as well as registration of contract pharmacy arrangements and the Pharmaceutical Pricing Agreement (PPA). OPA is requesting comments on an additional information collection request in response to the above pricing verification requirements.

Under Section 340B(d)(2)(B) of the PHSA, covered entities are required to register for participation in the 340B Drug Pricing Program and complete an annual recertification to verify eligibility. To register, covered entities must fill out an application with administrative information such as the name and address of the covered entity, Medicaid participation, Medicare Cost Report data, and obtain certifying information and signatures from authorizing officials within the organization who can legally bind the organization into an agreement with the Federal government. This information is verified by HRSA staff to determine eligibility and stored into the 340B database. HRSA requires that covered entities submit any modifications to the administrative information during registration and have an ongoing responsibility to notify HRSA of any changes to their eligibility status. To maintain accurate records, HRSA requires that covered entities must annually re-certify the accuracy of the information provided to HRSA, the maintenance of their eligibility, and to comply with statutory mandates of the program.

Section 340B(d)(1)(B)(i) of the PHSA requires the development of a system to enable the Secretary to verify the accuracy of 340B ceiling prices calculated by manufacturers under subsection (a)(1) and the drug prices charged to covered entities. The collection of information for this ICR will fulfill requirements mandated by the Affordable Care Act, including:

(I) Developing and publishing through an appropriate policy or regulatory issuance, precisely defined standards and methodology for the calculation of ceiling prices under such subsection.

(II) Comparing regularly the ceiling prices calculated by the Secretary with the quarterly pricing data that is reported by manufacturers to the Secretary.

(III) Performing spot checks of sales transactions by covered entities.

(IV) Inquiring into the cause of any pricing discrepancies that may be identified and either taking, or requiring manufacturers to take, such corrective action as is appropriate in response to such price discrepancies.

Under this ICR, on a quarterly basis, manufacturers will submit 340B pricing data into a pricing system, which will then verify and compare the manufacturer’s pricing data with HRSA’s 340B pricing data. The system will note any discrepancies with the pricing data and notify the manufacturers of the potential price discrepancies. Manufacturers will have an opportunity to review and reconcile any price discrepancies. HRSA will then review and verify the 340B pricing data and the final 340B ceiling price will be posted in the pricing system. Covered entities will be able to access the system and view the HRSA-verified 340B ceiling price to ensure that they are receiving covered outpatient drugs at or below the statutorily mandated 340B ceiling price.

3. Use of Improved Information Technology and Burden Reduction

Information collection via the new drug pricing instrument will be done strictly online. The respondents can either manually enter the requested information into the newly created secure pricing platform or upload their file into the system. The upload capability of the system reduces the burden on the user and reduces the errors that might occur from manually entering multiple lines of data.

4. Efforts to Identify Duplication and Use of Similar Information

HRSA is responsible for calculating the 340B ceiling price. Although two of the variables requested in this ICR can be obtained from the Centers Medicare & Medicaid Services (CMS), we have found inconsistences and discrepancies with the file received from CMS. The file from CMS is also not all encompassing of all the labeler codes or products that are required to participate in the 340B Program. For example, the file does not contain new products and manufacturers that participate in the 340B Program but not in the Medicaid Drug Rebate Program (MDRP). Therefore, this information collection does not duplicate any other effort.

5. Impact on Small Businesses or Other Small Entities

The collection of drug manufacturer data may impact up to 100 small businesses or other small entities, based on data from a past voluntary pilot. The new pricing system OPA is creating will helps these firms more easily and accurately report their data than was possible under the previous data collection method. The pricing system will be free, and will help manufacturers detect and correct potential data errors so that the government will have concurrence from the manufacturer for its calculations.

6. Consequences of Collection the Information Less Frequently

Pricing data submissions from manufacturers will occur on a quarterly basis as per Centers for Medicare and Medicaid Services requirements for submissions of Average Manufacturer Price (AMP) data, which HRSA uses to calculate the 340B ceiling price.

7. Special Circumstances Relating to the Guidelines of 5 CFR 1320.5

The Affordable Care Act required that manufacturers submit drug data on a quarterly basis to HRSA.

8. Comments in Response to the Federal Register Notice/Outside Consultation

Section 8A

A 60-day Federal Register Notice was published in the Federal Register on September 30, 2014 Vol. 79, No. 189, pp. 58791-58793. Seven comments were received from various pharmaceutical manufacturers and industry stakeholders. See Attachment I for comments.

Comments were received regarding the total burden hours estimate calculated by HRSA for manufacturer data required to verify 340B ceiling price calculations. Many stakeholders felt that the burden estimate of 0.50 hours per response was low and requested additional clarification to accurately calculate the burden hours. HRSA contacted stakeholders to obtain estimates on the total burden hours and determined that the estimate is sufficient as the quarterly pricing submissions require data that the manufacturers are already tracking and should be readily available.

Section 8B

Consultation and review of the registration and recertification materials was conducted by HRSA’s contracted the 340B Prime Vendor, the point of contact for all questions related to 340B registration and recertification. The 340B Prime Vendor analyzed data from several covered entities that utilized their call center with questions related to registration and recertification and determined that the current burden analysis is an accurate estimate of time that covered entities spend to complete the registration and/or recertification process.

On November 17, 2014, representatives from HRSA’s OPA met with members of the 340B Pharmaceutical Company Operational Work Group (340B OWG) to obtain manufacturer operational input on the submission of pricing data. HRSA addressed the workgroup’s questions regarding the calculation of the 340B ceiling price, handling pricing discrepancies, data elements, timing of submissions, security and confidentiality of pricing data.

Input from the following representatives was obtained:

Name	Title	Company	Phone Number	E-mail
Megan Thompson	340B Call Center Specialist	Apexus	888-340-2787	[email protected]
Mark Coin	Director, Federal Legislative Affairs	Baxter Healthcare	202-508-8200	[email protected]
Phillip Matheny	Operations Manager Federal Accounts	Genentech	402-891-8053	[email protected]
Ken Nelson	Director, Government Pricing Analytics	Johnson & Johnson	732-562-3000	[email protected]
Colleen Menges	Director of Government Contracts	Johnson & Johnson	732-562-3348	[email protected]
Frank Prybeck	Director Federal Government Pricing and Contracting	Celgene	908-673-9000	[email protected]
Kathleen Black	Director, Government Strategy	Pfizer	610-902-1200	[email protected]
David Buckley	Contract Operations Manager	GlaxoSmithKline	919-315-3329	[email protected]
Christopher Schott	Associate	Hogan Lovells	202-637-5467	[email protected]
Heather Dixson	Advisor Government Price Reporting	Eli Lilly	317-276-8626	[email protected]
Paula Martins	Manager, Government Contracts	Daiichi Sankyo, Inc.	973-630-2686	[email protected]
Justin Wutti	Government Pricing Specialist	Teva Pharmaceutical Industries	215-591-3000	[email protected]
Alice Valder Curran	Partner	Hogan Lovells	202-637-5997	[email protected]
Chris Hatwig	President	Apexus	972-910-6616	[email protected]

8. Explanation of any Payment/Gift to Respondents

Respondents will not receive any payments or gifts.

8. Assurance of Confidentiality Provided to Respondents

Application and eligibility information regarding covered entities that is collected for this submission does not contain any personal identifiers and therefore, does not apply to the Privacy Act.

Confidentiality of manufacturer ceiling price calculations has been assured in accordance with section 340B(d)(1)(B)(iii) of the Public Health Service Act.

8. Justification for Sensitive Questions

This data collection does not request sensitive information from the respondent.

8. Estimates of Annualized Hour and Cost Burden

12A. Estimated Annualized Burden Hours

Type of Collection	Number of Respondents	Responses per Respondent	Total Responses	Hours per Respondent	Total Burden Hours
Hospital Enrollment, Additions & Recertifications
340B Program Registrations & Certifications for Disproportionate Share Hospitals	44	1	44	2	88
340B Program Registrations & Certifications for Children's Hospitals	30	1	30	2	60
Certification to Enroll DSH and Children's Hospitals Outpatient Facilities to 340B Program	697	9	6273	30/60	3136.5
340B Program Registrations & Certifications for Free Standing Cancer Hospitals	30	1	30	2	60
340B Program Registrations & Certifications for Rural Referral Hospitals	30	1	30	2	60
340B Program Registrations & Certifications for Sole Community Hospitals	30	1	30	2	60
340B Program Registrations and Certifications for Critical Access Hospitals	30	1	30	2	60
Hospital Annual Recertifications	2134	6	12804	15/60	3201
Registrations and Recertifications for Entities Other Than Hospitals
340B Registration for all other covered entities	1479	2	2958	1	2958
Annual Recertification for Family Planning	3629	1	3629	15/60	907.25
Annual Recertification for STD & TB	3123	1	3123	15/60	780.75
Annual Recertification for Other Entities	2474	1	2474	15/60	618.5
Contracted Pharmacy Services Registration & Recertifications
Contract Pharmacy Self Certification Form	1758	5	8790	1	8790
Other Information Collections
Administrative Change Form	9396	1	9396	30/60	4698
Administrative Changes for Any Manufacturer	350	1	350	30/60	175
Manufacturer Data Required to Verify 340B Ceiling Price Calculations	600	4	2400	30/60	1200
Pharmaceutical Pricing Agreement	200	1	200	1	200
Total	26,034		52,591		27,054

340B Program Registrations & Certifications for Disproportionate Share Hospitals: refers to an electronic process by which eligible hospitals register for the program and obtain certifications of government ownership/operation or government contracts, as appropriate. It is estimated that approximately 44 new respondents per year take 2 hours to gather the information and complete these forms to register in the program, resulting in a total annual burden of 88 hours (44x 2 = 88 hours) for Hospitals.

340B Program Registrations & Certifications for Children's Hospitals: refers to an electronic process by which eligible children’s hospitals register for the program and obtain certifications of government ownership/operation or government contracts, as appropriate. It is estimated that approximately 30 new respondents per year take 2 hours to gather the information and complete these forms to register in the program, resulting in a total annual burden of 60 hours (30 x 2 = 60 hours).

Certifications to Enroll Disproportionate Share and Children’s Hospital Outpatient Facilities: refers to an electronic process by which eligible hospitals additionally register offsite outpatient facilities. It is estimated that 697 hospitals will each register approximately nine outpatient facilities, taking 0.50 hours per facility to gather the information and complete the enrollment process, resulting in a total annual burden of 3136.5 hours ((697 x 9) x 0.50 = 3136.5 hours).

340B Program Registrations & Certifications for Free Standing Cancer Hospitals: refers to an electronic process by which eligible free standing cancer hospitals register for the program and obtain certifications of government ownership/operation or government contracts, as appropriate. It is estimated that approximately 30 new respondents per year take 2 hours to gather the information and complete these forms to register in the program, resulting in a total annual burden of 60 hours (30 x 2 = 60 hours).

340B Program Registrations & Certifications for Rural Referral Hospitals: refers to an electronic process by which eligible rural referral hospitals register for the program and obtain certifications of government ownership/operation or government contracts, as appropriate. It is estimated that approximately 30 new respondents per year take 2 hours to gather the information and complete these forms to register in the program, resulting in a total annual burden of 60 hours (30 x 2 = 60 hours).

340B Program Registrations & Certifications for Sole Community Hospitals: refers to an electronic process by which eligible sole community hospitals register for the program and obtain certifications of government ownership/operation or government contracts, as appropriate. It is estimated that approximately 30 new respondents per year take 2 hours to gather the information and complete these forms to register in the program, resulting in a total annual burden of 60 hours (30 x 2 = 60 hours).

340B Program Registrations and Certifications for Critical Access Hospitals: refers to an electronic process by which eligible critical access hospitals register for the program and obtain certifications of government ownership/operation or government contracts, as appropriate. It is estimated that approximately 30 new respondents per year take 2 hours to gather the information and complete these forms to register in the program, resulting in a total annual burden of 60 hours (30 x 2 = 60 hours).

Hospital Annual Recertification: refers to an electronic process where hospitals verify their information in the 340B public database and attest that they continue to be eligible and in compliance with statutory requirements of the program. It is estimated that 2134 hospitals will each recertify approximately six participating locations. Gathering the necessary information and completing the recertification process will take 0.25 hours per location , resulting in a total annual burden of 3201 hours ((2134 x 6) x 0.25 = 3201 hours).

340B Registrations for all over Covered Entities: refers to an electronic process by which other eligible grant recipients (e.g. Black Lung Clinics, Consolidated Community Health Centers, Federal Qualified Health Center Lookalikes, Comprehensive Hemophilia Treatment Centers, Native Hawaiian Health Centers, Ryan White Programs, Tribal Contract/Compact Health Centers, and Urban Indian Health Centers) register for the program. It is estimated that 1479 entities take 1 hr to gather the information and complete this form to register in the program, resulting in a total annual burden of 2958 hours for these entities (1479 x 2 = 2958 hours).

Annual Recertification for Family Planning: refers to an electronic process where participating Family Planning clinics verify their information in the 340B public database and attest that they continue to be eligible and in compliance with statutory requirements of the program. It is estimated that 3629 Family Planning clinics will recertify. Gathering the necessary information and completing the recertification process will take 0.25 hours per location, resulting in a total annual burden of 907.25 hours (3629 x 0.25 = 907.25).

Annual Recertification for STD & TB: refers to an electronic process where participating STD and/or TB clinics verify their information in the 340B public database and attest that they continue to be eligible and in compliance with statutory requirements of the program. It is estimated that 3123 STD/TB clinics take 0.25 hours to gather the information and recertify, resulting in a total annual burden of 780.75 hours (3123 x 0.25 = 780.75 hours).

Annual Recertification for Other Entities: refers to an electronic process where participating covered entities verify their information in the 340B public database and attest that they continue to be eligible and in compliance with statutory requirements of the program. It is estimated that 2474 covered entities other than Hospitals, Community Health Centers, and STD/TB Clinics take 0.25 hours to gather the information and recertify, resulting in a total annual burden of 618.5 hours (2474 x 0.25 = 618.5 hours).

Contract Pharmacy Self Certification: refers to an electronic process where covered entities can record their contract pharmacy arrangements in the 340B public database. It is estimated that 1758 entities will each register approximately five contract pharmacy locations, taking 1 hour to gather the information and complete this process, resulting in a total annual burden of 8790 hours ((1758 x 5) x 1 = 8790 hours).

Administrative Change Form: refers to an electronic process by which 340B covered entities request changes to their records in the 340B public database. It is estimated that 9396 entities take 0.50 hours each to gather the information and complete this form to request change in the 340B public database, resulting in a total annual burden of 4698 hours (9396 x 0.50 = 4698 hours).

Administrative Changes for any Manufacturer: refers to the currently hardcopy form by which participating drug manufacturers request changes to their records in the 340B public database. It is estimated that 350 manufacturers take 0.50 hours each to gather the information and complete this form to request change in the 340B public database, resulting in a total annual burden of 175 hours (350 x 0.50 = 175 hours).

Manufacturer Data Required to Verify 340B Ceiling Price Calculations: refers to the drug product and pricing data that manufacturers must submit to the online 340B pricing database on a quarterly basis. It is estimated that 600 manufacturers will take 0.50 hours each to gather and upload or otherwise submit their information to the database on a quarterly basis, resulting in a total annual burden of 1200 hours ((600 x 4) x 0.5 = 1200 hours).

Pharmaceutical Pricing Agreement (PPA): Pursuant to the Public Health Service Act (PHSA), manufacturers that participate in the Medicaid program sign the PPA agreeing to charge 340B covered entities at or below a specified maximum price known as the 340B ceiling price, for covered outpatient drugs. It is estimated that 200 manufacturers take 1 hour to read and complete PPA, resulting in a total annual burden of 200 hours (200 x 1= 200 hours).

12B.

Type of Respondent	Total Burden Hours	Hourly Wage Rate	Total Respondent Costs
Hospital Authorizing Official (CEO, CFO, Executive Director, President, VP) (Chief Executive median hourly wage from BLS- http://www.bls.gov/oes/current/oes111011.htm)	9,074.5	$80	$725,960
Non-Hospital Authorizing Official and Hospital 340B Primary Contact (Program Manager, Director, etc.) (General and Operations Managers median hourly wage from BLS - http://www.bls.gov/oes/current/oes111021.htm)	7,613.5	$50	$380,675
Contract Pharmacy Authorizing Official (Pharmacist median hourly wage from BLS http://www.bls.gov/oes/current/oes291051.htm)	8,790	$60	$527,400
Manufacturer Authorizing Official (General and Operations Managers median hourly wage from BLS - http://www.bls.gov/oes/current/oes111021.htm)	1,575	$50	$78,750
TOTAL:	27,053		$1,712,785

8. Estimates of other Total Annual Cost Burden to Respondents or Recordkeepers/Capital Costs

There are no capital, start-up, or maintenance costs for the respondents.

8. Annualized Cost to Federal Government

This is an ongoing information collection request. The estimated average federal cost to implement the manufacturer and covered entity requirements in the 340B pricing and registration systems will be approximately $3.58 million per year. The HRSA contractor will develop and maintain the system on an annual basis.

Description	Time	Salary	Annual Cost
Pricing & Registration Database Maintenance/Enhancement Contract	Yearly	N/A	$3,221,135
Public Health Analyst (hospital registrations) - GS-13/1	75% of time	$90,823	$68,117
Public Health Analyst (hospital registrations) – GS-13/1	75% of time	$90,823	$68,117
Public Health Analyst (hospital registrations) – GS-13/1	75% of time	$90,823	$68,117
Public Health Analyst (non-hospital registrations) – GS-13/1	75% of time	$90,823	$68,117
Public Health Analyst (non-hospital registrations) – GS-13/1	75% of time	$90,823	$68,117
Public Health Analyst (recertifications) – GS-13/1	75% of time	$90,823	$68,117
Program Management Officer (pricing) – GS-13/1	75% of time	$90,823	$68,117
Branch Chief – GS-14/1	50% of time	$107,325	$53,663
Total per year:			$3,751,617

8. Explanation for Program Changes or Adjustments

Currently, there are 14,704 total reporting and record keeping burden hours in the OMB inventory.  HRSA is requesting 27,483.5 burden hours, an increase of 12,779.5 hours.  The increase is associated in part with the implementation of manufacturer data collection provisions of section 340B of the Public Health Service Act that were amended by section 7102 of the Affordable Care Act, enabling the Secretary to verify the accuracy of ceiling prices calculated by manufacturers and charged to covered entities by comparing them with ceiling prices calculated by the Secretary. In order to perform the comparison, HRSA must require manufacturers to submit the quarterly pricing data containing the average manufacturer price, unit rebate amount, package sizes, National Drug Code, and the manufacturer-determined 340B ceiling prices. The anticipated burden has also increased due to updates made to the estimated number of covered entity respondents and responses per respondent based on 2014 registration and recertification data; we have additionally modified the way respondents and responses are counted to more accurately reflect the number of organizations registering for the program and the number of locations registered by each of those organizations.

8. Plans for Tabulation, Publication, and Project Time Schedule

A three year clearance is being requested for this recurring data collection. There are no plans for tabulation, statistical analysis or publication of the information collected.

8. Reason(s) Display of OMB Expiration Date is Inappropriate

No exemption is being requested. The expiration date will be displayed.

8. Exceptions to Certification for Paperwork Reduction Act Submissions

There are no exceptions to the certification.

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