Quarles Health & Life Sciences attorneys Brenda Shafer, Michael French and Richard Davis recently wrote an article for Law360 about questions surrounding the ability of the Health Resources and Services Administration’s ability to enforce key requirements related to the Section 340B drug pricing program.

In the article, Shafer, French and Davis address aspects of the 340B program such as manufacturer contract pharmacy pricing restrictions and associated litigation, Section 340B PBM anti-discrimination laws and Section 340B HRSA audit trends.

An excerpt from the article:

The Section 340B program, Public Health Service Act Section 340B, Title 42 of the U.S. Code, Section 256b, allows qualifying safety net providers to purchase certain outpatient medications at significant discounts. Savings resulting from program participation are significant and relied upon by participating hospitals and clinics to serve their patient populations more effectively.

The HRSA primarily defined the contours of the 340B program, especially those related to contract pharmacy relationships, through subregulatory guidance documents and FAQs.

Until late 2019, Section 340B stakeholders operated within the parameters of this subregulatory guidance. However, in late 2019, the HRSA appeared to question and reevaluate its own enforcement authority based on Executive Order 13892, which was geared toward limiting the prevalence and enforceability of administrative guidance documents promulgated outside of the formal rule making process.

With this regulatory background in mind, four recent developments in the Section 340B space are discussed below, with guidance about what each means for your clients.