The HHS General Counsel on Wednesday advised drugmakers that they must provide 340B discount prices to pharmacies that contract with covered entities.
Drugmakers in recent months have taken aggressive actions to crack down on 340B drug discounts through contract pharmacies and demand more data from healthcare providers Pharmaceutical companies appeared to be testing how far they could challenge subregulatory guidance issued by the Health Resources and Services Administration that allows 340B providers to receive discounts while working with multiple contract pharmacies.
The action prompted several lawsuits, including those filed by community health centers and several hospital groups. HHS issued a legal opinion in support of covered entities.
“To the extent contract pharmacies are acting as agents of a covered entity, a drug manufacturer in the 340B Program is obligated to deliver its covered outpatient drugs to those contract pharmacies and to charge the covered entity no more than the 340B ceiling price for those drugs,” HHS General Counsel Robert Charrow wrote.
Drugmakers had voiced displeasure with the rapid growth of contract pharmacy usage and sought to restrict the discounts they provided to on-site pharmacies run by covered entities, or a limited number of contract pharmacies if providers didn’t have an on-site option. Charrow said the drugmakers could not restrict their discounts in this way, as less than 5% of covered entities had on-site pharmacies.
“The (site) of delivery, be it the lunar surface, low-earth orbit, or a neighborhood pharmacy, is irrelevant,” Charrow wrote.