Richie Davis and Michael French Quoted in 340B Report Article About Unclear Effects “Most Favored Nation" Executive Order Could Have on 340B Programs
Richie Davis and Michael French, attorneys in the Quarles & Brady Health & Life Sciences Practice Group, were quoted in a 340B Report article that discussed how President Trump’s “most favored nation" (MFN) executive order could affect 340B programs. The article discusses MFN, which aims to link prescription drug prices in the United States to the lowest prices paid in other developed countries, and how pricing for prescription drugs could lead to lower 340B ceiling prices but the long-term impacts remain highly uncertain.
Davis explained that the executive order does not directly contemplate the 340B program but changes to manufacturer’s pricing methodology could have an impact. French added that more will be known once the Trump administration assesses and acts upon some of the indicators they included in the MFN executive order.
An excerpt:
“The executive order doesn’t directly contemplate 340B, and it wouldn’t have any immediate impact on 340B program operations or obligations,” explained Richard Davis, a partner at the law firm Quarles, which represents 340B providers and other program stakeholders. “But any change to manufacturers’ pricing methodology could have an impact on the 340B ceiling price calculation.”
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“We might end up seeing a world where the 340B ceiling prices are lower,” Davis said.
Additionally, lower manufacturer prices could drive down the average sales price
(ASP), Davis added. ASP is used to determine Medicare reimbursement for many drugs administered by 340B providers, particularly under Part B.
Still, Davis emphasized that the full extent of any 340B effects will depend on how aggressively the administration moves forward and how drugmakers respond.
If the administration is not satisfied with how manufacturers reduce their prices, the order allows it to take additional steps, including developing a rule to impose MFN pricing or modifying or revoking drug approvals through the FDA. However, it’s also possible that the MFN policy could “simply get lost in the ether” amid competing administration priorities, Davis said.
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“We’re in a bit of a holding pattern until the Trump administration assesses and potentially acts upon some of the indicators that they included in the MFN executive order,” added Michael French, an associate at Quarles focused on the 340B program and pharmacies.