The End of a Wild Year for 340B: HHS Issues Advisory Opinion and New GAO Report Sheds Light on HRSA’s Enforcement Pullback2020 was a tumultuous year for virtually everyone and everything, and the 340B Program was no exception. As we outlined in previous articles, many drug manufacturers have decided that the Health Resources and Services Administration’s Office of Pharmacy Affairs (“HRSA OPA”) guidance on contract pharmacy[1] arrangements is no longer binding. Accordingly, many drug manufacturers have curtailed selling 340B-priced drugs based on contract pharmacy encounters, causing a significant disruption in operations and loss in revenue for all types of 340B covered...More
Notice to Covered Entities: Manufacturer Seeking 340B Claims Data
While we addressed recent wins for 340B covered entities concerning manufacturer transparency in a previous article, Merck Sharpe & Dohme Corp. (“Merck” or “Manufacturer”) now appears to seek its own access to 340B covered entity data in a different fashion.
Specifically, over the past few weeks, Merck has sent letters to numerous 340B covered entities substantially in the form below seeking access to all contract pharmacy claims data for its products. The Manufacturer letter requests that the covered entity “share 340B...More
CMS Publishes 340B Drug Acquisition Cost Survey: Respond by May 15, 2020
On April 24, 2020, the Centers for Medicare and Medicaid Services (CMS) finalized and published a survey intended to capture the actual amounts paid by 340B covered entities (excluding critical access hospitals) for 340B drugs. CMS then intends to use the data collected from the survey to adjust the Medicare Part B reimbursement rate for 340B drugs purchased by certain covered entities. This survey is an offshoot of the ongoing litigation surrounding the Medicare Part B payment reductions that CMS imposed...More
HRSA Unveils New 340B Flexibilities During COVID-19 Crisis
As the COVID-19 crisis continues to unfold, the Health Resources & Services Administration Office of Pharmacy Affairs (HRSA OPA) has taken unprecedented steps to provide 340B Program participants with additional flexibility to help meet surging patient demand. At the highest level, HRSA OPA acknowledges that “this public health emergency may warrant additional flexibilities, especially to affected 340B covered entities.”
More specifically, HRSA OPA has taken the following steps and provided the following guidance to assist 340B Program participants treating a surge...More
GAO Report Suggests Increased Oversight of 340B ProgramOn January 10, 2020, the Government Accountability Office (GAO) released a report which “found weaknesses in the Health Resources and Services Administration’s (HRSA) oversight [of the 340B Program] that may result in some hospitals receiving discounts for which they are not eligible.” The GAO report primarily focused on the extent to which HRSA is monitoring and reviewing nongovernmental hospitals’ contracts with state or local governments. These contracts, required by statute as a condition of participation in the 340B Program, must be between the...More
New PBM State Laws Indicate a Shifting Battlefront over 340B Program Drug Pricing
While much attention has been paid to the ongoing litigation related to the ongoing 340B Medicare Part B payment reduction litigation (which is now pending before the US Court of Appeals for the DC Circuit), new legislation at the state level may also have a significant impact on covered entity reimbursement for 340B drugs.
Specifically, state legislatures have been getting involved in 340B Program reimbursement rate regulation between covered entities and pharmacy benefit managers (PBMs) regarding 340B drugs. By way of...More
Interesting 340B Takeaways from 2020 OPPS Proposed Rule
The Centers for Medicare & Medicaid Services (CMS) “respectfully disagreed” with a recent federal district court’s “understanding of the scope of CMS’ adjustment authority” in making cuts to Medicare Part B reimbursement for drugs purchased through the 340B program, saying it plans to continue its 28.5 percent reduction in reimbursement while it pursues an appeal in federal court.
In its recently issued 2020 proposed Outpatient Prospective Payment System Final Rule (“OPPS Final Rule”), CMS plans to continue reimbursing certain categories of...More
340B Litigation Updates and Other Program Developments340B Medicare Part B Adjustment Litigation Update
In the latest development of the ongoing 340B Medicare Part B payment reduction controversy, US District Judge Rudolph Contreras again concluded that the Department of Health and Human Services (HHS) exceeded its statutory authority in implementing a reduced Medicare reimbursement rate for 340B Program drugs for 2019. In issuing the opinion, the court relied upon the same analysis it employed to declare the same 2018 reimbursement reductions unlawful. As such, the court has enjoined...More
The President’s 2020 Budget Keeps 340B Program in the Spotlight
On March 11, 2019, the President delivered his proposed 2020 budget to Congress. While a President’s budget proposal is the beginning of a lengthy budget process, this proposed budget nonetheless keeps the 340B Program in the national focus and delineates the President’s position on desired 340B Program changes.
Specifically, the President’s proposed 2020 budget requests the following 340B Program changes:
Grant the Health and Human Resources Administration Office of Pharmacy Affairs (“HRSA OPA”) broad regulatory authority for the 340B Program to set...More
CVS Caremark Reverses Planned Payment Cuts to 340B ProvidersCVS Caremark has decided not to implement reimbursement reductions which may have had adverse effects on Covered Entities and their retail pharmacies (including contract pharmacies). This decision, coupled with the recent court decision invalidating certain aspects of the proposed Medicare Part B payment reductions for 340B drugs,[1] provides some positive news for these Covered Entities after years of uncertainty over the future of the 340B Program.
By way of background, CVS Caremark, a pharmacy benefits manager (PBM), issued notices of amendments...More
