340B Program Latest Developments: 340B-Related Litigation, HHS Advisory Opinion, New Dispute Process Final Rule

Description

In December 2020, the HHS, Health Resources and Services Administration (HRSA) issued a long-awaited final rule for the 340B drug pricing program dispute resolution. The final rule establishes an administrative dispute resolution (ADR) process for drug manufacturers and 340B covered entities. The final rule may also play a role in connection with current 340B litigation related to manufacturer attempts to limit the use of 340B contract pharmacy arrangements.

Also, in December 2020, the HHS Office of the General Counsel released an advisory opinion indicating that the 340B statute requires drug manufacturers to offer 340B discounts on covered outpatient drugs dispensed through contract pharmacies.

Several drug manufacturers filed legal challenges to the final rule and the advisory opinion. The district court judge granted a preliminary injunction as to the implementation of the final rule in one of these challenges. In that case, the court determined the manufacturer established with a fair likelihood of success that HHS violated Administrative Procedure Act requirements in issuing the final rule and likely suffered irreparable harm.

In response to the on-going litigation, HHS indicated that it may take administrative measures to enforce 340B program rules and, among possible actions, prevent drug makers from denying discounts when healthcare providers use contract pharmacies. In May 2021, HRSA sent letters to six manufacturers notifying them that their actions were in violation of the 340B statute, ordering them to resume offering 340B pricing and issue refunds, and referencing the possibility that civil monetary penalties would be imposed if the manufacturers continued their behavior.

Listen as our authoritative panel of healthcare attorneys examines the recent developments related to the 340B program and what they mean for healthcare providers and drug manufacturers. The panel will address the new dispute resolution process, recent litigation, and recent HHS actions.