A Key Federal Court Ruling on 340B

340B Insight

The world of 340B has seen significant developments on the state and national levels in recent months. A second federal appeals court decision on 340B contract pharmacies came down in recent weeks, a new bill in Congress threatens to impose significant restrictions on hospital participation in 340B program, and more states move to protect covered entities from drugmaker restrictions. To understand these new developments, 340B Health President and CEO Maureen Testoni joins us to explain more.

A second federal appeals court rules for drug companies

In May, the D.C. Circuit Court of Appeals ruled that the 340B statute does not categorically prohibit drug manufacturers from imposing their own conditions on 340B. However, the court did note that manufacturers cannot impose a condition that effectively prevents a covered entity from purchasing a particular drug at the 340B price. This raises the importance of entities demonstrating situations in which they are cut off from all 340B access to a drug. Another appeals court based in Chicago has yet to issue a decision in its 340B contract pharmacy case.

More states ban 340B restrictions as the industry increases state lobbying efforts

So far this year, Kansas, Maryland, Minnesota, Mississippi, and West Virginia have joined Arkansas and Louisiana in enacting laws to prohibit contract pharmacy restrictions on covered entities. But the pharmaceutical industry has become much more active in opposing ongoing legislative efforts in other states. A “dark money” group also has been running ads opposing these state bills by accusing covered entities of laundering taxpayer money to subsidize care for undocumented immigrants.

New pharma-backed bill in Congress would slash 340B hospital eligibility

U.S. House lawmakers recently introduced a bill known as the 340B ACCESS Act. The legislation is backed by the Pharmaceutical Research & Manufacturers of America (PhRMA) and the National Association of Community Health Centers (NACHC). It would impose significant restrictions on 340B hospital eligibility and access to savings, including by restricting 340B usage for insured patients and tying participation in the 340B program directly to levels of charity care.

Resources:

1. Statement on New Federal Legislation To Restrict 340B Hospital Eligibility

2. Statement on D.C. Circuit Appeals Court Decision on Drug Companies’ 340B Restrictions

3. Report: 340B Hospitals Prescribe Medicare Part D Drugs to Greater Shares of Historically Underserved Patients

4. House Energy and Commerce Oversight and Investigations Subcommittee Hearing on 340B June 4