If you have been following the trials, tribulations and changes within 340B throughout the 2020 year, one of the biggest upsets was caused by manufacturers such as Eli Lilly, Novartis, and Sanofi removing 340B pricing on any medication dispensed through a Covered Entity’s contract pharmacies. When HRSA was asked, they took the unfortunate stance that they could not enforce or do anything against these actions, and it was left to HHS to stand up.
After months of silence, and among thousands of voices of uproar, lawsuits and news articles, HHS’ top lawyer finally issued a statement Wednesday (12/30/2020). According to an Advisory Opinion issued by the Office of the General Counsel for HHS, these restrictions by manufacturers are not in accordance with the purposes and intent of the 340B Drug Pricing Program.
The groundbreaking release states that “to the extent that contract pharmacies are acting as agents of a covered entity, a drug manufacturer in the 340B Program is obligated to deliver its covered outpatient drugs to those contract pharmacies and to charge the covered entity no more than the 340B ceiling price for those drugs”.
It goes on to say that the core requirements of 340B statute state manufacturers must offer these covered outpatient drugs at or below ceiling price for “purchase by covered entities” and that the requirement “is not qualified, restricted or dependent on how the covered entity chooses to distribute” these medications and “the situs of delivery, be it the lunar surface, low-earth orbit, or a neighborhood pharmacy, is irrelevant”.
Manufacturers have stated that they have taken these steps to restrict contract pharmacy deliveries because “such arrangements lead to a heightened risk of diversion and duplicate discounts”. This is countered by the statement from the OGC that these actions “makes clear that manufacturers are attempting to circumvent section 340B’s procedures for resolving disputes between manufacturers and covered entities”. You can read the entire release from HHS here.
Earlier this month HRSA issued a final rule that “sets forth the requirements and procedures for the 340B Program’s administrative dispute resolution (ADR) process. The purpose of the final rule (set to take effect on January 13th, 2021) is to clearly define and resolve claims by covered entities that they have been overcharged on 340B covered drug, but also covers claims by drug manufacturers, after a proper audit has been completed, that a covered entity violated prohibitions on duplicate discounts or Medicaid diversion. More information on this ruling can be found on the federal register.
With this statement, we, along with many other 340B participants, supporters and stakeholders, are definitely set to celebrate the end of 2020.
So as we look forward to the start of a new year, we are hopeful that waves throughout the 340B Program are now set to bring back a feeling of normalcy, and even those of forward progress.
For more on how to optimize and protect your 340B Program, reach out to Lyssa by phone at 208-860-2157 or email at Lyssa@optimal340b.com.