Beginning June 18, a newly finalized rule from the Health Resources and Services Administration will take effect and change how the resolution of disputes within the 340B program is handled.
HRSA experts from the agency's Office of Pharmacy Affairs will oversee and handle disputes and claims related to overcharges for drugs, diversions of 340B drugs to ineligible patients, and duplicate discounts.
Unlike the previous rule, the new 340B drug pricing program's administrative dispute resolution process has no minimum claim threshold; aims to streamline procedural processes and remove cumbersome, high-cost legal representation; and allows for an additional review process if either party is unhappy with the resolution.
However, before engaging in the administrative dispute resolution process, both parties must have made good faith efforts to resolve the dispute on their own, according to the finalized rule.
The 340B drug pricing program has been in place since 1992 to allow qualifying hospitals and clinics that treat low-income and uninsured patients to purchase some drugs at a discounted rate of between 25% and 50%.
Enrollment in the 340B program has drastically increased in recent years, leading to more disputes between covered entities who need to obtain affordable medications for uninsured or underinsured patients and drugmakers who need to protect their profits and resources. The combination has created a perfect storm, sparking a need for HRSA to address and speed up its resolution process.
Here are seven other recent developments in 340B legislation that may affect hospitals, health systems and pharmacies:
- June 6: A bill was introduced in the Michigan House of Representatives which seeks to prevent drugmakers "from denying access to drugs to certain organizations that participate in the federal 340B drug pricing program."
- June 4: CEOs of two U.S. health systems — Zanesville, Ohio-based Genesis Healthcare System and Greenwood, S.C.-based Carolina Health Center — testified before a House subcommittee on the oversight of the 340B drug pricing program, advocating for the preservation of the protections.
- June 3: The American Hospital Association sent a letter to the House of Representatives stating, "Hospitals provided nearly $42 billion in uncompensated care in 2019 alone, of which 340B hospitals roughly made up 68% of that number." The AHA continued: "In addition, in 2020, 340B hospitals provided $84.4 billion in total community benefits, a nearly 25% increase from the prior year. 340B hospitals are providing these high levels of uncompensated care and community benefits despite operating on razor-thin margins."
- May 30: New York City-based Mount Sinai posted an operating income of $11.6 million in the first quarter of 2024, which is down from an operating income of $45.3 million over the same period last year. The health system specifically reported some decline was due to a decrease in 340B pharmacy revenue.
- May 29: Novartis filed a lawsuit against the state of Maryland over a new law that forbids manufacturers from "taking certain direct or indirect actions to limit or restrict the acquisition or delivery of a 340B drug."
- May 28: Representatives from Indiana, Georgia, and Tennessee introduced a federal bill in the House that seeks to amend the 340B program by recognizing contract pharmacies, restricting pharmacy benefit managers and tightening other components of eligibility. The bill also outlines the definition of what a covered entity patient is, establishes child site eligibility and requires 340B entities to commit to a sliding scale of fees to ensure drug discounts are met.
- May 21: The U.S. Court of Appeals for the Washington, D.C. Circuit sided with drug manufacturers' ability to limit sales and distribution of discounted drugs in the government's 340B drug pricing program. The panel of judges said that 340B "does not categorically prohibit manufacturers from imposing conditions on the distribution of covered drugs to covered entities. We further hold that the conditions at issue here do not violate Section 340B on their face."