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    2021 Brings Legal Challenges, Unprecedented Support for 340B: 340B Coalition Winter Conference Keynote Summary

    By Kirsten Onsgard • February 25, 2021

    As 340B faces threats from drug manufacturers, support for the program and health centers is stronger than ever.

    That was the message from Maureen Testoni, president and CEO of 340B Health, as she opened this year’s 340B Coalition Winter Conference. The keynote, The State of 340B: Rising to the Challenges of Our Times, provided insights on the present and future of 340B as lawsuits from drug manufacturers and 340B supporters ensue. 

    The presentation also included an update from Rear Admiral Krista Pedley, the Director of Pharmacy Affairs at HRSA, who spoke about how HRSA has supported health centers through COVID-19, and provided an update on HRSA audits.

    Here are five insights we gleaned from the keynote.

    New Legal Battles Challenge 340B and Covered Entities

    Last year, six major drug manufacturers presented a challenge to how 340B has operated. The manufacturers rolled out new rules on 340B discounts, saying that they did not apply when the drugs were dispensed at contract pharmacies. 

    However, at the end of 2020, HHS issued a statement clarifying that drug manufacturers must provide 340B discounts when a contract pharmacy is acting as an agent of a covered entity, providing services on behalf of the covered entity—a win for 340B covered entities that rely on the funding to provide services to patients in need. Drug manufacturers have taken the fight to court.

    Drug discounts vary from 25-50% per drug, and approximately $30 billion in discount drugs are sold to covered entities each year. 

    Support for 340B is as Strong As Ever

    While legal battles ensue, the support for 340B is strong. Several CEs, 340B Health and five national pharmacist organizations have launched their own lawsuit to implore HHS to take action. In addition, more than 60 organizations devoted to healthcare, civil rights, patients and consumers have signed onto a letter urging HHS to protect 340B

    “We speak with one powerful voice on this issue to seek justice for the 340B program and the providers and patients who rely on it,” said Testoni.

    Testoni said that national research shows that 340B serves providers in need, keeps drug prices in check and helps efforts to address healthcare inequality in the nation. In addition, she said that covered entities continue to show the value of 340B through the anecdotes they tell and data they report. She urged CEs to continue to take action by contributing to 340B research and showing the impact of 340B through audio, video and written stories.

    CEs Are On the Front Lines Against COVID-19

    Health centers have made an enormous impact on the fight against COVID-19 by adapting and rising to the challenge. 

    HRSA has mobilized more than $2.5 billion to grantees across programs to combat COVID, including $2 billion to HRSA-funded health centers. Health centers have used these funds to expand testing, monitor symptoms to relieve burdens on ERs, coordinate with local and state health departments, provide ongoing primary care and mental health services, said Pedley.

    As a result of the pandemic, HRSA’s audits are now taking place remotely. Pedley urged CEs to visit HRSA’s COVID-19 FAQs page for other updates and answers to common questions.

    An Update on HRSA Audits

    Pedley said that HRSA has completed 1,540 audits since fiscal year 2012, including a review of 20,000 off-site facilities and 34,000 contract pharmacies. 200 CE audits are planned this year, as well as 5 drug manufacturer audits. 

    Pedley urged CEs to continue to ensure their policies and procedures were updated and clearly reflected their own unique situations and processes. She said it’s critical to have a system to track every purchase of 340B drugs to ensure compliance. 

    A New Administration Could Bring Changes

    Last fall, the Trump administration issued an executive order limiting how much agencies could use their guidance to enforce rules around programs they oversee. Because this occurred at the same time as several 340B-related lawsuits, HRSA felt it was limited in its ability to take action. 

    The Biden administration has since rescinded this executive order, giving agencies more authority to use their guidance to enforce rules. However, it has yet to be seen how this will affect HRSA and 340B. 

    Testoni said “she had a sense” that HRSA has strong views on how they believe the program should be implemented. In letters obtained by 340B Health via Freedom of Information Act requests, HRSA implored drug manufacturers to allow 340B discounts for drugs dispensed at contract pharmacies.

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