A recent hfma article highlighted several significant legal developments that could shape the future of the 340B Drug Pricing Program, including a federal appeals court decision addressing manufacturer rebate models, ongoing contract pharmacy litigation, state law challenges, and disputes over the definition of a 340B-eligible patient. Bass, Berry & Sims partner Jeff Davis provided insight into how these cases may affect providers and the broader 340B landscape.
Discussing the U.S. Court of Appeals for the D.C. Circuit’s recent ruling on manufacturer rebate programs, Jeff noted that the decision was largely favorable for providers because it confirmed that drug manufacturers cannot unilaterally convert the traditional 340B discount model into a rebate-based approach without federal approval. “That’s certainly welcome news from a provider perspective,” Jeff said, explaining that several manufacturers had sought to move 340B “from an up-front discount program into a back-end rebate program” without obtaining authorization from HRSA. He further emphasized that the ruling “did not at all limit HRSA’s ability to proceed with the rebate pilot program” currently under development.
Jeff also highlighted a number of other closely watched cases that could have substantial implications for covered entities. He noted that litigation involving state contract pharmacy protections has created a circuit split among federal appeals courts, raising questions about the potential for future Supreme Court review. In addition, he pointed to AbbVie’s challenge to HRSA’s longstanding patient definition guidance as a particularly consequential dispute. “At its core, the ability to generate the 340B benefit is dependent on providers’ ability to dispense a 340B drug to an individual who is a 340B eligible patient,” Jeff said. “If the definition of a 340B eligible patient is shrunk, then that will mean fewer prescriptions that could be filled at 340B pricing.” He added that the lawsuit is testing whether HRSA’s historic interpretation of patient eligibility is broader than federal law permits, a question that could significantly affect providers’ ability to access 340B savings.
As manufacturers, providers, regulators, and courts continue to weigh in on these issues, Jeff noted that the coming decisions could have lasting effects on how the 340B program operates and how covered entities access and utilize the program’s benefits.
The full article, “What appeals court 340B rebate decision means for federal rebates,” was published on July 28 by hfma and is available online.