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Public Policy Newsletter Article

Industry Pushes Back on Continued Issues with 340B Program

  • 2021-03-25T15:00:00.000+0000
  • Author: Izzie Omer

On December 14, 2020, HHS released its 340B Administrative Dispute Resolution (ADR) Final rule, with no advance notice or opportunity for public comments. The ADR rule establishes appeals panels to administer and decide claims by 340B contract pharmacies against drug manufacturers that would enable contract pharmacies to receive the same discounts as 340B covered entities. Manufacturers could be subject to penalties for failure to offer the discounts.

The 340B program requires that pharmaceutical companies give safety-net and rural healthcare providers discounts on their drugs, in exchange for having their drugs covered by Medicaid and Medicare. The program intends to protect low-income populations, but there are substantial areas for improvement, especially regarding the lack oversight of intermediary organizations and contract pharmacies, as well as the growing size of the program. Today thousands of contract pharmacies benefit from the 340B program.

In January 2020, Eli Lilly and the Pharmaceutical Research and Manufacturers of America (PhRMA) both sued the Department of Health and Human Services (HHS) over the ADR rule. On March 16, 2021, the United States District Court for the Southern District of Indiana granted Eli Lilly’s request for a preliminary injunction to halt implementation of the rule.