Earlier this month, HRSA set forth steps that providers should follow to make a “self-disclosure” when a “material breach” of 340B compliance has occurred.  HRSA noted that it is “working to standardize the self-disclosure process, and highlight best practices to assist covered entities in this effort.”

During the annual covered entity recertification process, the 340B entity’s authorizing official attests to the fact that “the covered entity acknowledges its responsibility to contact HRSA as soon as reasonably possible if there is any . . . material breach by the covered entity of any of the foregoing [points of 340B compliance].”

HRSA noted that self-disclosures should not be limited to the annual recertification timeline, but should be made as soon as “reasonably possible after a violation.”

Under HRSA’s guidance, 340B entities should include in their self-disclosure report to HRSA the following information:

  • 340BID;
  • the violation that occurred;
  • scope of the problem;
  • a corrective action plan (CAP) to fix the problem moving forward;
  • a strategy to inform affected manufactures (if applicable); and
  • a plan for financial remedy if repayment is owed.

The program update does not define “material breach,” but according to the 340B Prime Vendor Program Q&As, a “material breach” in the recertification context “refers to an instance of non-compliance with any of the 340B Program requirements.” HRSA recommends that, as a matter of best practice, 340B entities use the reporting tool developed by Apexus, HRSA’s prime vendor, and this tool indicates that that type of situations that would require disclosure are “duplicate discount, patient definition, GPO Prohibition, [or] Orphan Drug Exclusion” issues.

HRSA also instructed the 340B entity and the manufacturer to work out any necessary financial remedy “in good faith.”  HRSA will follow-up with any questions about the self-disclosure information, and once all criteria have been met, the 340B entity will receive written communication that the matter is closed.

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Photo of Jennifer Plitsch Jennifer Plitsch

Jennifer Plitsch is co-chair of the firm’s Government Contracts practice group. Her practice includes a wide range of contracting issues for large and small businesses in both defense and civilian contracting. Her practice involves advising clients on contract proposal, performance, and compliance questions…

Jennifer Plitsch is co-chair of the firm’s Government Contracts practice group. Her practice includes a wide range of contracting issues for large and small businesses in both defense and civilian contracting. Her practice involves advising clients on contract proposal, performance, and compliance questions as well as transactional and legislative issues. Her practice also includes bid protest and contract claims and appeals litigation before GAO, agency boards and the federal courts. Ms. Plitsch has particular expertise in advising clients in the pharmaceutical and biologics industry. She advises a range of pharmaceutical and biologics manufacturers on Federal Supply Schedule contracts, including the complex pricing requirements imposed on products under the Veterans Health Care Act, as well as research and development contracts and grants with various federal agencies. She also has significant experience advising on the requirements of various programs under which vaccine products and biodefense medical countermeasures are procured by the Government.