340B discounts apply to contract pharmacies, HHS clarifies

HHS released an advisory opinion Dec. 30 stating that 340B drug discounts apply to community pharmacies contracted to dispense drugs for hospitals participating in the 340B program. 

The agency said it has become aware of drugmakers refusing to provide 340B discounts to 340B hospitals that use community pharmacies to dispense prescription drugs for patients, known as contract pharmacies. The advisory opinion clarifies that 340B discounts should be given even if drugs are dispensed through contract pharmacies. 

"Whether it's making sure 340B discounts are passed on to patients or ensuring that drug companies are delivering these discounts in the first place, we've ensured that the deep discounts offered under 340B are helping the vulnerable populations the program was set up to benefit," HHS Secretary Alex Azar said in a news release. 

HHS estimates that about $30 billion worth of drugs are sold to 340B covered entities each year, making up about 6 percent of all prescription drugs sold in the U.S., and that 340B discounts can range between 25 percent and 50 percent. 

Advisory opinions don't carry the force of a law, but they guide how HHS enforces the program. Drugmakers are required to participate in the program in order to have their drugs covered by Medicaid and Medicare Part B. 

Five national hospital organizations sued HHS  this month, accusing it of failing to make sure drugmakers follow the 340B statute. 

Since September, six drugmakers have announced policies to stop giving 340B hospitals discounts on drugs dispensed through community pharmacies, arguing it causes them to pay duplicate discounts. Hospitals say it is illegal for drugmakers to create such policies since they deny hospitals drug discounts mandated by law. 

Read the full news release here

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