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This week, we are joined by 340B Health President and CEO Maureen Testoni. Maureen provides analysis of the most recent developments regarding the 340B contract pharmacy dispute and what’s next in the efforts to resolve the matter. Before our conversation, we share the findings of a recently released 340B Health report that demonstrates how 340B hospitals are treating large percentages of patients who often are underserved by the broader health care system.

HRSA’s Letters to Drug Companies

On May 17, HRSA sent letters to the six drug companies that have refused to provide 340B discounts to safety-net hospitals and other providers on drugs dispensed at community pharmacies. The letters require the drug companies restore the discounts and repay all overcharges. 

Drug Companies’ Response to HRSA

After receiving letters from HRSA, the drug companies went to federal court to prevent HRSA from enforcing the 340B statute. The drug companies had already been challenging a December 2020 advisory opinion from the Health and Human Services (HHS) General Counsel that said that drug companies must provide 340B discounts on drugs dispensed at community pharmacies. Following a federal court decision in one of the cases challenging the advisory opinion, HHS chose to withdraw the advisory opinion. Maureen explains that HHS has said it does not need the advisory opinion to continue with the steps it needs to take to enforce the 340B statute. 

HRSA’s Next Steps

Maureen explains that HRSA can refer the drug companies’ actions to the HHS Office of the Inspector General (OIG). The OIG can impose civil monetary penalty fines on the drug companies. These fines can be imposed when drug companies knowingly and intentionally overcharge covered entities. The fines can be $6,000 dollars per overcharge. However, Maureen shares that drug companies are putting up a strong fight and that it will take time for this issue to be resolved. 

Next Steps for 340B Hospitals 

340B hospitals are waiting to be paid current and past refusals of 340B discounts. The refusals limit their ability to provide services for low-income and rural patients. Maureen recommends that hospitals continue sharing examples of the damage drug company refusals to provide 340B discounts is doing to patient care. Maureen says this type of advocacy led to HRSA issuing the May 17 enforcement letters to the drug companies and is needed to keep the pressure on the drug companies. She also invites listeners to attend the 340B Coalition Summer Conference in July to hear from top 340B experts and key officials regarding the contract pharmacy issue. 

340B Health Continues the Fight

340B Health is active in the litigation processes in various states. The organization is filing friend-of-the-court briefs describing the effects the drug companies’ actions have on covered entities and their patients and addressing incorrect information in drug companies’ briefs on how the contract pharmacy system works. Maureen shares that 340B supporters are fighting a strong fight and that the Department of Justice has shown strong support for providers and what the 340B statute requires. Maureen credits HRSA leadership and Secretary Becerra for HHS’ recent actions and the many patient and provider groups as well as members of Congress who have advocated for the drug companies to restore the discounts. 

Check out all our episodes on the 340B Insight podcast website. You also can stay updated on all 340B Health news and information by visiting our homepage. If you have any questions you would like us to cover in this podcast, email us at [email protected].

Resources 

1. New 340B Health Report on the Comparison of Medicare Beneficiaries Treated in 340B Hospitals, Non-340B Hospitals, and Independent Physician Offices
2. New Federal 340B Order Is Major Step Toward Restoring Drug Discounts
3. 340B Health Statement on Withdrawal of HHS Advisory Opinion on 340B Community Pharmacies
4. The Human Toll of Drug Company Restrictions on 340B 
5. 2021 340B Coalition Summer Conference