HHS defends covered entities as they continue to fight pharmaceutical manufacturers in 340B debate

Since the beginning of the contract pharmacy challenge between HRSA and covered entities started, the American Hospital Association (AHA) has asked the Biden Administration to protect the 340B Program and the Health Resources and Services Administration (HRSA) has published new guidance. Pharmaceutical manufacturers continue to block covered entities from filling patients 340B medications at contract pharmacies.

New to the challenge, “five hospital associations, the association of hospital pharmacists and three hospitals are suing federal health officials [because of the pharmaceutical] manufacturers’ [that are denying] 340B pricing for the drugs shipped to [a covered entities’ contracted] contract pharmacies,” such as CVS and Walgreens. “The groups and hospitals said the companies ‘should reimburse 340B entities for the damages they have incurred.’ If the companies persist, the groups and hospitals said they ‘will continue to seek to require the United States Department of Health and Human Services (HHS) to enforce the 340B statue, covered entities are reimbursed for damages caused by the illegal policy, and the matter is referred to the HHS Inspector General for the imposition of civil money penalties.’”

Community health centers and HIV/AIDS clinics and hospital groups separately sued HHS over the pharmaceutical manufacturers’ position. The “National Association of Community Health Centers (NACHC) sued HHS in October [2020] to force it to implement a long-delayed 340B program mandatory and binding administrative dispute resolution (ADR) process. HHS published a final rule to implement the ADR system, which took effect 1/13/2021. NACHC and HHS agreed to stay proceedings in the lawsuit through 2/15/2021 to let the rule establishing the ADR system take effect and let NACHC or its members ‘avail themselves of that process.’”

In late December 2020, HHS released an advisory opinion clarifying that 340B discounts apply to contract pharmacies. While this does not carry the force of the law, “the new advisory opinion [clarifies] that [pharmaceutical] manufacturers must provide 340B discounts when a contract pharmacy is acting as an agent of a covered entity, providing services on behalf of the covered entity.”

We’ll continue to keep you updated on this unfolding issue.

No matter where you are in your journey to having a 340B Pharmacy Program, we can help! We can help you implement, manage or oversee it and ensure you maintain status and compliance through our 340B Pharmacy services that help you achieve financial independence. HRSA is allowing covered entities to enroll in the program on a weekly basis to better serve patients throughout the pandemic.

Let's talk about your 340B Pharmacy goals and how its savings can help you implement programs that benefit your patients.

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