340B Archives - HEALTH & LIFE SCIENCES NEWS

California Ballot Proposition 34 Targets Spending by Certain 340B Covered Entities

by Emily Jane Cook and Patrick Moore | Nov 20, 2024 | 340B

Proposition 34 requires certain California healthcare providers to spend at least 98% of their net drug sale revenue on direct patient care. The measure targets certain providers who benefit from a federal drug discount program known as the 340B Program.

The 340B Program allows qualifying safety net healthcare providers who serve a disproportionate share of low-income and uninsured patients to purchase outpatient drugs at a significant discount. The intent of the 340B Program is to allow providers that participate in the program to offer more comprehensive services to patients and their communities.

The 340B Program does not dictate how eligible providers use revenue generated from sales of the discounted drugs. Proposition 34 imposes such restrictions.

Who Does It Affect?

Not all providers who participate in the 340B Program are affected by Proposition 34. It only applies to 340B providers that:

Spend more than $100 million on non-direct-care expenses.
Own and operate apartment buildings.
Have accumulated at least 500 severe health and safety violations in the past decade.

Currently, the AIDS Healthcare Foundation (AHF) is believed to be the only organization that meets these criteria.

Background and Controversy

Proposition 34 is one of the first state-level efforts to restrict use of savings generated from participation in the 340B Program. Opponents of Proposition 34 believe that it was on the ballot largely due to political and housing interest groups’ opposition to the president of AHF and certain spending by AHF under his leadership. AHF has become a significant player in [...]

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This Week in 340B: October 15 – 21, 2024

by Emily Jane Cook, Reuben Bank, Margaret Houtz, Jae Hyun Lee and Patrick Moore | Oct 23, 2024 | 340B

Find this week’s updates on 340B litigation to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets of more than 50 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation. Get more details on these 340B cases and all other material 340B cases pending in federal and state courts with the 340B Litigation Tracker.

Issues at Stake: Contract Pharmacy; Other

In an appealed qui tam action alleging that various drug manufacturers failed to charge accurate ceiling prices to 340B Covered Entities, the appellees filed an answering brief.
In nine cases challenging proposed state laws governing contract pharmacy arrangements in Mississippi, Louisiana, Minnesota, West Virginia and Missouri:
- LA: The plaintiff filed an appeal.
- MN: The defendant in two related cases filed a reply in support of their motion to dismiss.
- WV: The defendant in three cases filed notices of supplemental authority
- MO:
  - In one case, three amici filed a motion for leave to file an amicus brief with the court, defendants filed a memorandum in support of their motion to dismiss, two intervenors filed a verified motion to intervene and suggestions in support, and plaintiffs filed a response to defendant’s motion to dismiss.
  - In another case, plaintiffs filed a response to defendant’s motion to transfer.
- MS: The defendant filed a reply in opposition to the plaintiff’s motion for [...]
  
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This Week in 340B: October 8 – 14, 2024

by Emily Jane Cook, Jae Hyun Lee, Deepika Raj and Kelsey Reinhardt | Oct 17, 2024 | 340B

Find this week’s updates on 340B litigation to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets of more than 50 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation. Get more details on these 340B cases and all other material 340B cases pending in federal and state courts with the 340B Litigation Tracker.

Issues at Stake: Contract Pharmacy

In eight cases challenging proposed state law governing contract pharmacy arrangements, in Louisiana, Missouri, Minnesota, and Kansas:
- LA: the Plaintiff filed an appeal.
- MO: amici filed a motion for leave to file an amicus brief in one case and Defendants filed a reply in support of its motion to transfer venue.
- KS: the court filed an order to consolidate all contract pharmacy cases for discovery purposes only.
- MN: the Plaintiffs in each of two cases filed an opposition to Defendant’s motion to dismiss.

Loper Bright and the 340B Statute

by Emily Jane Cook | Jul 11, 2024 | 340B

In its Loper Bright decision last week, the Supreme Court of the United States likely opened opportunities for further legal challenges to the Health Resources and Services Administration’s (HRSA’s) interpretation and application of the 340B statute. Going forward, we expect that much of the 340B statute will be subject to interpretation by federal courts.

HRSA’s historic policies that are not the “best” interpretation of the statutory language may not survive legal challenges. Where HRSA retains the authority to regulate the 340B program, it will be required to demonstrate that it is acting based on “reasoned decision-making.”

Examples of what the application of the new Loper Bright standard might look like in practice, as applied to provisions in the 340B statute:

Definition of “Patient”: The 340B statute does not define “patient.” The 340B statute states in relevant part that “a covered entity shall not resell or otherwise transfer the drug to a person who is not a patient of the entity.” Under Loper Bright, a court will likely decide, without deference to HRSA, who qualifies as a patient. A court is not required to defer to HRSA’s statutory interpretation.
Requirements for Registration of DSH Hospital Child Sites Prior to Use of 340B Drugs: The 340B statute defines disproportionate share hospital (DSH) hospital covered entities as “a subsection (d) hospital (as defined in section 1886(d)(1)(B) of the Social Security Act) that [meets certain additional requirements set forth in the statute related to ownership, DSH percentage and GPO purchasing].” The 340B statute [...]

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This Week in 340B: January 31 – February 7, 2024

by Emily Jane Cook, Bryan Frederick and Patrick Moore | Feb 9, 2024 | 340B

Find this week’s updates on 340B litigation to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets of more than 50 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation. Get more details on these 340B cases and all other material 340B cases pending in federal and state courts with the 340B Litigation Tracker, a subscription product from McDermott+Consulting.

Issues at Stake: Contract Pharmacy; Other

In a qui tam False Claims Act action alleging that defendants failed to charge accurate ceiling prices to 340B Covered Entities, the plaintiff-relator submitted a memorandum in opposition to the defendants’ renewed request for judicial notice and an omnibus opposition to defendants’ motion to dismiss the first amended complaint.
In a case regarding a state law governing contract pharmacy arrangements, the oral argument for defendant’s motion to dismiss was set for March 5, 2024.
In a separate case regarding a state law governing contract pharmacy arrangements, the court denied plaintiff’s motion to file a second amended complaint, ordered the clerk to close the case, and issued a judgment in favor of Defendant pharmaceutical companies.

This Week in 340B: November 6 – 12, 2023

by Emily Jane Cook, Reuben Bank and Kelsey Reinhardt | Nov 15, 2023 | 340B

This weekly series provides brief summaries to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets of more than 50 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation.

Issues at Stake: Contract Pharmacy, Medicare Payment

In response to the final rule published on November 2, 2023 detailing a remedy for underpayment in light of the Supreme Court’s decision in AHA v. Becerra, the parties in 11 of the pending Medicare Payment Cut cases requested that the cases be further stayed by 100 days to allow for implementation of the final rule. The parties anticipate that the cases would be dismissed after the payments are made. Stay Orders were issued in six of the cases.
In a qui tam action against a group of drug manufacturers, the plaintiffs filed an amended complaint.
A case attempting to invalidate an Arkansas state law governing contract pharmacy arrangements was transferred to a judge who is presiding over a case with similar allegations.
In two separate cases attempting to invalidate the same Louisiana state law governing contract pharmacy arrangements, a non-profit comprised of community health centers filed a Motion to Intervene and an Answer in Intervention to the plaintiff’s complaint.

Get more details on these 340B cases and all other material 340B cases pending in federal and state courts with the
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This Week in 340B: August 30 – September 6, 2023

by Emily Jane Cook and Kelsey Reinhardt | Sep 8, 2023 | 340B

This weekly series provides brief summaries to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets of more than 50 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation.

Issues at Stake:

The trade association appellant in a contract pharmacy case notified the court that the government appellee began enforcement of a state law that is the subject of their pending litigation.
The State of New York filed an antitrust case against a large retail pharmacy chain.

Get more details on these 340B cases with the 340B Litigation Tracker, a subscription product from McDermott+Consulting.

This Week in 340B: March 21 – 27, 2023

by Emily Jane Cook, Reuben Bank, Ming Chuang and Kelsey Reinhardt | Mar 28, 2023 | 340B

This weekly series provides brief summaries to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets on more than 40 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation.

Issue at Stake: 340B Covered Entity

The plaintiff in one case involving covered entities and the prime vendor program has filed an opposition to the defendant’s motion to dismiss the case.

Get more details on these 340B cases with the 340B Litigation Tracker, a subscription product from McDermott+Consulting.

This Week in 340B: March 14 – 20, 2023

by Emily Jane Cook, Reuben Bank, Ming Chuang and Kelsey Reinhardt | Mar 22, 2023 | 340B

This weekly series provides brief summaries to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets on more than 40 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation.

Issue at Stake: 340B Covered Entity

A new case was filed against the New York State Department of Health arguing that the “340B Carveout” is unconstitutional and would limit 340B Covered Entities’ opportunities to realize 340B savings on drugs dispensed to Medicaid managed care enrollees.

Get more details on these 340B cases with the 340B Litigation Tracker, a subscription product from McDermott+Consulting.

This Week in 340B: February 21 – 27, 2023

by Emily Jane Cook, Ming Chuang and Kelsey Reinhardt | Feb 27, 2023 | 340B

This weekly series provides brief summaries to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets on more than 40 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation.

Issues at Stake: Contract Pharmacy
Where Things Stand:

In one contract pharmacy case, the plaintiff-appellant filed its opening brief arguing that Section 340B and the Federal Food, Drug, and Cosmetic Act preempt an Arkansas state law regulating manufacturers’ delivery of 340B-discounted drugs.
The district court judge in a state law case involving a 340B covered entity plaintiff has discharged its show cause order.
The district court judge in a contract pharmacy case has granted the parties’ joint motion to stay further proceedings in the matter pending HHS’ ongoing rulemaking proceeding relating to the 340B administrative dispute resolution rule.
In three contract pharmacy cases that were decided in January, HHS filed an Unopposed Motion for a 30-Day Extension of Time to File a Petition for Rehearing En Banc.

Get more details on these 340B cases with the 340B Litigation Tracker, a subscription product from McDermott+Consulting.

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