We have noted before the link between the Medicaid prescription drug rebate program and the 340B program. As we wrote in an earlier Client Alert, in June 2022, the U.S. Supreme Court struck down HHS’s Medicare payment cuts to 340B hospitals for separately payable outpatient drugs. The Court then remanded to the district court to determine the appropriate remedy. The 340B-specific Medicare payments started in 2018,… More
Category Archives: 340B Drug Pricing Program
Supreme Court Hears Arguments on 340B Outpatient Payment Cuts—and Discusses ‘Chevron Deference’
Over the summer, my colleague Tom Barker discussed how the Supreme Court was planning to hear several health care cases during the October 2021 term. Last week, the Court heard oral arguments for two noted cases: during Monday’s (November 29) arguments for Becerra v. Empire Health Foundation, the Court was asked to decide if the Administrative Procedure Act (APA) gives HHS authority to interpret the Medicare statute and recalculate payments made to disproportionate share hospitals (DSH);… More
District Courts Issue Key Decisions in 340B Contract Pharmacy Cases
Update: On November 10, 2021 Eli Lilly filed a notice of appeal in the case Eli Lilly and Company v. Becerra case challenging the October 29th decision by the Southern District of Indiana.
Over the last two weeks we have seen a flurry of activity from U.S. District Courts across the country in the ongoing contract pharmacy disputes between pharmaceutical manufacturers and HRSA,… More
Summer Reruns: ‘340B Contract Pharmacy Saga’ Back in the Spotlight as OGC Withdraws Advisory Opinion
Like the Brood X cicadas emerging from their 17-year chthonic slumber, summer 2021 saw the reemergence of something else set to dominate headlines: 340B contract pharmacies. Given the link between the Medicaid drug rebate program and 340B, we at Medicaid and the Law cover relevant 340B topics for our readers.
Today, we are discussing the “340B Contract Pharmacy Saga” in light of the Department of Health and Human Services (HHS) Office of General Counsel’s (OGC’s) June 18 announcement withdrawing Advisory Opinion 20-06. … More
The 340B Contract Pharmacy Saga Continues
Hello readers of Medicaid and the Law! First and foremost, we here at the blog would like to wish our readers a very happy and healthy new year. We are looking forward to continuing to provide essential insight into some of the most important Medicaid and related health law issues to come in 2021.
Today, we will be providing an update on the “340B Contract Pharmacy Saga.” Back in September,… More
The 340B Contract Pharmacy Saga
We are back again with another 340B post. The 340B program has recently been a regular feature on the blog in the context of ongoing litigation discussed here and here. Today, we wanted to provide readers the details of an ongoing saga on a different aspect of the 340B program – the growing presence of contract pharmacies in the 340B space, and recent efforts by drug companies to curb this trend.… More
CMS Prevails in Litigation Challenging Pricing Policy for 340B Drugs
We’ve written before about the 340B program, which allows some health service providers that treat low-income patients to purchase outpatient prescription drugs at deeply discounted prices. It’s related (at least tangentially) to our blog because of the link between the 340B program and the manner in which the Medicaid program pays for outpatient drugs; essentially, the price that a 340B covered entity pays for a drug is the price that Medicaid would pay for the drug when it’s dispensed to a Medicaid patient: at least 23.1% off of the manufacturer’s price of the drug.… More
Massachusetts Medicaid Proposes Changes to Hospital Acquisition of Costly Prescription Drugs
Earlier this year, we wrote about a lawsuit involving the 340B drug pricing program. We sometimes write about the 340B program because it is integrally linked to the Medicaid prescription drug rebate program. So today, we wanted to call attention to a proposed regulation issued by the Massachusetts Medicaid program (which is called “MassHealth”) that shows that link clearly.
Section 1927 of the Social Security Act requires pharmaceutical manufacturers to provide a rebate to state Medicaid plans if they want to have their drugs covered by Medicaid. … More
District Court Strikes Down 340B Hospital Outpatient Payment Cuts
Happy New Year! While healthcare developments have been relatively slow lately due the ongoing partial Federal shutdown, an important story did arise over the most recent Holidays. We previously wrote about a lawsuit filed in November 2017 by a group of hospital trade associations against the Department of Health and Human Services (HHS) opposing a major change in Medicare reimbursement policy when 340B hospitals purchase drugs under the 340B program for use in the hospital outpatient setting.… More
Trump Administration Outlines Priorities For FY 2019
The past couple of weeks have involved a flurry of healthcare-related developments, including on the Medicaid drug pricing front. On February 9, 2018, President Trump signed into law the Bipartisan Budget Act of 2018, which revises the rebate formula for line extensions applicable to certain drugs in the Medicaid program. Then later that same day, the Council of Economic Advisors issued a report titled “Reforming Biopharmaceutical Pricing at Home and Abroad,” which among other things,… More
MassHealth Leads The Way Towards Addressing Cell and Gene Therapy Reimbursement
Since August, 2017, a new class of transformative therapies referred to as cell therapies or gene therapies have been approved by the US Food and Drug Administration (FDA). These new cell and gene therapies are typically administered once, as opposed to repeatedly over the course of the patient’s lifetime.
Payers, providers, and manufacturers have been considering how existing payment systems – particularly Medicare and Medicaid – can recognize the value of these new treatments. … More
340B Hospitals File Suit in Wake of Hospital Outpatient Cuts
Back in July, my colleague Tom Barker told you about a CMS proposal to institute a fundamental reimbursement methodological change for 340B drugs used in the hospital outpatient setting. We have noted before the link between the Medicaid prescription drug rebate program and the 340B program. As a refresher, in order to have its outpatient drugs covered by Medicaid, the manufacturer must agree to three separate requirements. First,… More
CMS Proposes Fundamental Reimbursement Methodological Change for 340B Drugs Used in Hospital Outpatient Setting
We have noted before the link between the Medicaid prescription drug rebate program and the 340B program. As a refresher, in order to have its outpatient drugs covered by Medicaid, the manufacturer must agree to three separate requirements. First, the manufacturer must agree to provide a rebate to Medicaid equal to the greater of 23.1% of the average manufacturer price (AMP) of the drug, or AMP minus the best price of the drug. … More
Summary of the “340B Drug Pricing Administrative Dispute Resolution” Proposed Rule
Overview & Analysis
On August 12, 2016, the Health Resources and Services Administration (HRSA) published a proposed rule entitled “340B Drug Pricing Program; Administrative Dispute Resolution” (Proposed Rule). The Proposed Rule follows the Advanced Notice of Proposed Rulemaking (APRM) issued by HRSA on September 20, 2010 and aims to establish requirements and procedures for the 340B Program’s administrative dispute resolution (ADR) process. Interested parties may submit written comments on or before October 11,… More
OIG Says State Methods For Preventing Duplicate Discounts Are Vulnerable
The Office of Inspector General (OIG) recently issued a report titled “State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates.” In its report, OIG wanted to study the different methods that states were using to prevent illegal “duplicate discounts” that occur as a result of the interaction between the Medicaid drug rebate program and the 340B drug-discount program. OIG revealed that the systems a majority of states have for preventing duplicate discounts are actually quite vulnerable,… More