May 19, 2021
The Health Resources and Services Administration (HRSA) Acting Administrator Diana Espinosa sent letters to six pharmaceutical manufacturers stating that HRSA has determined that their policies that place restrictions on 340B Program pricing to covered entities that dispense medications through pharmacies under contract have resulted in overcharges and are in direct violation of the 340B statute.
Beginning in July 2020, these manufacturers began taking specific actions that limited a covered entity’s access to discounted drugs available for purchase under the 340B Program. Some manufacturers stopped providing the 340B ceiling price on their drug products sold to covered entities and dispensed through contract pharmacies, while others limited sales by requiring specific data submissions or selling drug products only after a covered entity has demonstrated 340B compliance. HRSA has conducted a review of these actions and an analysis of complaints received from covered entities, resulting in today’s letters.
The 340B Program Ceiling Price and Civil Monetary Penalties final rule states that any manufacturer participating in the 340B Program that knowingly and intentionally charges a covered entity more than the ceiling price for a covered outpatient drug may be subject to a Civil Monetary Penalty (CMP) not to exceed $5,000 for each instance of overcharging. Assessed CMPs would be in addition to repayment for an instance of overcharging.
“[The drug manufacturer] must immediately begin offering its covered outpatient drugs at the 340B ceiling price to covered entities through their contract pharmacy arrangements…” HRSA Acting Administrator Diana Espinosa wrote in the letters. “[The drug manufacturer] must comply with its 340B statutory obligations and the 340B Program’s CMP final rule and credit or refund all covered entities for overcharges that have resulted from [this] policy. . . . Continued failure to provide the 340B price to covered entities utilizing contract pharmacies, and the resultant charges to covered entities of more than the 340B ceiling price, may result in CMPs as described in the CMP final rule.”
The full text of the letters can be found on the Program Integrity page.