340B ACCESS Act Aims to Clarify Contract Pharmacy Role in Drug Discount Program

“The 340B Drug Discount Program is the second largest government pharmaceutical program based on net drug spending and is only behind Medicare Part D. It's been the subject of a lot of legislation and hearings in Congress because of its growth and because of the confusion over contract pharmacies.”

In this episode of Complications: Health Policy Unraveled, host Stephanie Kennan discusses the latest on the 340B Drug Discount Program, which since 1992 has provided low income and uninsured patients increased access to drugs by requiring manufacturers to provide outpatient drugs to eligible healthcare organizations at a discount.

Tune in to learn about 340B ACCESS Act, the latest bill introduced in the House attempting to clarify the intent and operations of the 340B Drug Discount Program and hear about how the controversy over the use of contract pharmacies in the 340B Drug Discount Program has played out in the courts and state legislatures.

Meet Your Host

Name: Stephanie Kennan

Title: Senior Vice President, Federal Public Affairs at McGuireWoods Consulting

Specialty: Stephanie Kennan helps clients navigate the legislative and executive branches of the federal government to solve problems involving a variety of healthcare policy issues. Her work focuses on providers, medical device manufacturers, drug manufacturers and associations concerned about Medicare and Medicaid reimbursement.

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Episode Highlights

[00:33] The 340B ACCESS Act is the latest bill introduced in the House attempting to clarify the intent and operations of the 340B Drug Discount Program administered by the Health Resources Services Administration.

[02:54] The 340B Drug Discount Program requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations at discounted prices in order to remain eligible for reimbursement through Medicaid.

[04:04] The use of contract pharmacies has become controversial as covered entities have increased their use of contract pharmacies. In the summer of 2020, some drug manufacturers began announcing restrictions on 340B covered entities that distribute 340B drugs using contract pharmacies.

[04:34] Manufacturers argue that the restrictions are necessary to prevent duplicate discounting and unlawful distribution of 340B drugs to non-patients, while covered entities argue that they are paying more for certain 340B drugs and can’t generate savings from them.

[05:02] Health Resources Services Administration (HRSA) responded to the restrictions in 2021 by issuing violation letters to manufacturers. Several manufacturers then sued the HRSA. One of the cases is still pending.

[05:40] Contemporaneously, several states began considering legislation to make it unlawful for drug manufacturers to restrict contract pharmacy use by covered entities within their states. In one case Pharma sued the state of Arkansas, and lost.

[07:02] It’s now up to Congress to clarify the appropriate role of contract pharmacies in the 340B program.

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