Insights & Resources

In a major win for 340B covered entities, which includes among others certain hospitals and, FQHCs, the Health Resources and Services Administration (HRSA) sent letters on May 17, 2021 to six pharmaceutical manufacturers informing them that they could no longer restrict 340B pricing to covered entities that use contract pharmacies.  Covered entities are permitted under the 340B program to dispense 340B-discounted drugs through their own pharmacies or through contracts with outside pharmacies.  Starting last year, these manufacturers began taking actions that limited covered entities’ access to discounted drugs through the 340B program. Some stopped providing the 340B discount price for products dispensed through contract pharmacies, while others limited sales by requiring onerous data submissions or proof of 340B compliance.

HRSA’s letters stated that the manufacturers’ actions have resulted in overcharges and are in direct violation of the 340B statute. The manufacturers must immediately begin offering covered outpatient drugs at the 340B discount price to covered entities through their contract pharmacy arrangements and repay covered entities for the overcharges.  These manufacturers also may be subject to civil monetary penalties (CMPs) of up to $5,000 for each instance of overcharging under the 340B Program Ceiling Price and Civil Monetary Penalties final rule.  HRSA warned that continued violations would result in additional CMPs.
Should you have any questions regarding the above or if your facility has been denied 340B discounts by any manufacturer and you need assistance, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.