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Richard Davis, Michael French and Brenda Maloney Shafer Write Article for Pharmacy Times on 340B Sustain Act


Richard Davis, Michael French and Brenda Maloney Shafer, all Quarles & Brady Health Law attorneys, wrote an article for Pharmacy Times regarding the latest in the 340B Drug Pricing Program space and the 340B Sustain Act. They discuss how the Act is intended to address the ongoing uncertainty within the 340B Program space and provide a high-level synopsis of key changes the Act proposes.

An excerpt:

It continues to be an eventful and tumultuous time in the 340B Drug Pricing Program space, with little indication that the current environment will change any time soon. Numerous drug manufacturers continue to impose restrictive 340B pricing policies available via 340B contract pharmacy arrangements in contravention of the Health Resources and Services Administration's (HRSA) applicable 340B Program rules and guidance. Ongoing litigation over these manufacturer restrictions, along with separate litigation challenging HRSA’s historic 340B eligible patient requirements,1 has further eroded the agency’s enforcement authority and created significant uncertainty surrounding the manner in which different types of 340B stakeholders can (or must) operate. Increased scrutiny on 340B covered entities’ savings utilization has also become a flashpoint.

At a high level, the SUSTAIN Act proposes the following key changes:

  • Contract Pharmacy Use: The draft SUSTAIN Act formalizes covered entity contract pharmacy arrangements within the 340B statute and imposes a penalty on drug manufacturers that refuse to offer or otherwise impose conditions on 340B pricing available for drugs utilized in contract pharmacy arrangements. This provision is similar to the protections within Arkansas’ now upheld Act 11034 and the separately proposed 340B PATIENTS Act at the federal level.5
  • Patient Definition: The draft act includes a placeholder for a definition of the term “patient,” allowing stakeholders to propose an appropriate definition. This is particularly relevant in light of the recent Genesis decision, which highlighted the lack of statutory clarity as to who is a “patient” for 340B Program purposes.6
  • Child Sites: The draft clarifies child site eligibility criteria and directly ties eligibility to existing Medicare provider-based rules.
  • Transparency: It requires covered entities to provide additional reports on the use of the 340B savings generated.
  • Program Integrity: It allows for more extensive government oversight and auditing of 340B Program participants.
  • Duplicate Discounts: The act establishes a neutral, centralized clearing house to process claim information submitted by covered entities and state Medicaid agencies.
  • PBM Anti-Discrimination: It enacts federal prohibitions on pharmacy benefits manager (PBM) discrimination against covered entities, in line with similar legislation enacted in a majority of states.
  • Miscellaneous Provisions: The draft act introduces a 340B “user fee” on covered entities, facilitates studies and reports regarding duplicate discounts and contract pharmacy dispensing fees, and approves an additional $3 million per year in funding from 2025 to 2029 for 340B Program audits, oversight, investigations, and enforcement activities.



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