Bass, Berry & Sims attorneys Jeff Davis and Michael Hess provided insight for several articles examining the recent federal court decision saying the Health Resources and Services Administration’s (HRSA) definition of a 340B-eligible “patient” is too limiting. The response to the lawsuit is not yet clear, but the decision could result in broader use of 340B drugs if the government were to adopt the court’s definition of a 340B-eligible patient.
While some pharmaceutical manufacturers have sought to limit the 340B program, Jeff told Endpoints News that the court’s opinion “suggests manufacturers would not be able to impose restrictions on 340B use based on their own narrow interpretation of a 340B-eligible patient that is not supported by the statute.”
When asked what might be next for the 340B program, Jeff said that Congress is the one “that would need to take action to limit 340B, if there was interest in taking such a step, but the court also reiterated that HRSA does have the authority to interpret the statute and administer the program, so long as HRSA’s interpretations are consistent with the statutory text.”
Michael spoke about the potential pharmaceutical industry response saying, “We may see pharma being more aggressive in looking at ways to even implement new structures that prevent the way covered entities are trying to sidestep those contract pharmacy restrictions” and “we will see that continued trend over the next 12 months.”
Jeff was also interviewed on the HealthLeaders podcast examining the financial impact of the 340B ruling. In discussing how hospital system CFOs can best adapt to the volatility of the uncertain financial situation in light of the new 340B ruling, Jeff said “The best, as an industry, that hospitals can do to be prepared to address what is to come is to just stay on top of developments – having those 340B oversight committees meeting regularly, bring in outside folks to come in and talk about the day-to-day developments … and have as many data points as possible so that when the hospital/health system is making decisions with respect to future 340B program use you have as much information in front of you as you can to make an informed decision.”
Media coverage included:
- “Court May Expand 340B Drug Discount Program as CMS Preps $9B for 1,700 Hospitals,” Endpoints News (November 6, 2023) (subscription required)
- “340B Court Decision Threatens To Expand Patient Eligibility; Can Pharmacy Restrictions Counter Program Growth?” Pink Sheet (November 7, 2023)
- “How CFOs Can Strategize Amid 340B Payment Unrest,” HealthLeaders Podcast (November 21, 2023)
Jeff and Michael were co-authors on the firm’s analysis of the court’s ruling, which is available here. Content from this analysis was cited in the article, “’Stunning’ Court Ruling Broadens Hospitals’ 340B Use, Calls HRSA’s Enforcement Authority into Question,” published by Fierce Healthcare on November 7. This content was also republished by Westlaw Today on November 20, 2023 (2023 WL 8008569) and is available online or in the provided PDF.