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HHS General Counsel Confirms Community Pharmacies Are Entitled to 340B Drug Pricing

January 13, 2021

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CONTACTS
Ivy Baer, Senior Director and Regulatory Counsel

The General Counsel for the Department of Health and Human Services (HHS) issued an advisory opinion on Dec. 30, 2020, in response to recent actions taken by some major drug manufacturers to unilaterally refuse to provide discounts to 340B hospitals for drugs dispensed at community pharmacies [see Washington Highlights, Nov. 13, 2020].

The opinion stated that “the Office of the General Counsel concludes that covered entities under the 340B Program are entitled to purchase covered outpatient drugs at no more than the 340B ceiling price—and manufacturers are required to offer covered outpatient drugs at no more than the 340B ceiling price—even if those covered entities use contract pharmacies to aid in distributing those drugs to their patients.” 

The AAMC — along with four other hospital organizations, a group representing hospital pharmacies, and three hospitals — filed a lawsuit against HHS on Dec. 11, 2020, asking the U.S. District Court for the Northern District of California to issue a preliminary injunction directing HHS to take immediate action to stop these drug manufacturers from refusing to provide the legally-required 340B discounted price to community pharmacies [see Washington Highlights, Dec. 18, 2020].

Counsel representing the AAMC and other plaintiffs sent letters on Jan. 7 to United Therapeutics, Eli Lilly, Novo Nordisk, Novartis, Sanofi, and AstraZeneca. These letters informed the companies that in light of the HHS General Counsel’s advisory opinion, if they continue to illegally fail to provide 340B drugs at or below the 340B ceiling price when community pharmacies are used, the plaintiffs will continue to “seek to require that HHS enforce the 340B statute, covered entities are reimbursed for damages caused by the illegal policy, and the matter is referred to the HHS Inspector General for the imposition of civil money penalties.”

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