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340B Litigation Updates and Other Program Developments

To Be or Not to 340B Brenda M. Shafer, Richard B. Davis

340B 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 HHS' proposed Medicare reimbursement reductions for both 2018 and 2019.

However, the court declined to vacate the rules, citing the "havoc vacatur may wreak on Medicare's administration." Instead, the court ordered HHS to take a "first crack" at implementing a remedial measure to address the payment cuts. The court indicated that it may reconsider its order if HHS fails to do so within a reasonable time frame. HHS has until August 5, 2019 to submit a status report regarding its progress to remedy the issues raised in the litigation.

We will closely track developments in this area, and publish an update once HHS' status report is available.

HRSA (Finally) Publishes 340B Ceiling Prices

After years of delay, the Health Resources and Services Administration (HRSA) finally launched a new online portal that identifies the 340B ceiling price for 340B covered outpatient drugs. This pricing portal was mandated via HRSA rulemaking back in 2017 and is now available to covered entities here.

As stated in our prior article, the 340B ceiling price refers to the maximum amount that a manufacturer can charge a covered entity for the purchase of a 340B covered outpatient drug. The 340B ceiling price is statutorily defined as the Average Manufacturer Price (AMP) reduced by the rebate percentage, which is commonly referred to as the Unit Rebate Amount (URA). The new online portal allows HRSA to collect this information directly from manufacturers, thereby both increasing program transparency and enabling HRSA to more easily resolve discrepancies and pricing disputes between covered entities and manufacturers.

If you have any questions about these updates and how they might affect your 340B program participation, please contact your Quarles & Brady attorney or: