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On December 11, 2020, five hospital groups, including the American Hospital Association (“AHA”), and an organization of hospital pharmacists representing participants in the 340B drug pricing program (“340B Program”), filed a federal lawsuit (the “340B Program Litigation”) against the U.S. Department of Health and Human Services (“HHS”) over HHS’ alleged failure to enforce 340B Program requirements that obligate pharmaceutical manufacturers to provide 340B Program prescription drug discounts to pharmacies contracted by 340B Program-participating hospitals to dispense 340B Program drugs.[1]
As discussed in detail in an earlier blog post, the 340B Program has long been a source of contention between pharmaceutical manufacturers and 340B Program-participating hospitals – called “covered entities” in the 340B Program. The 340B Program requires manufacturers to sell drugs to 340B-participating hospitals
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Contract Pharmacies and the 340B Drug Discount Program: New Litigation and an Advisory Opinion Point to Ongoing Skirmishes on the 340B Battlefield Friday, January 8, 2021
On December 11, 2020, five hospital groups, including the American Hospital Association (“AHA”), and an organization of hospital pharmacists representing participants in the 340B drug pricing program (“340B Program”), filed a federal lawsuit (the “340B Program Litigation”) against the U.S. Department of Health and Human Services (“HHS”) over HHS’ alleged failure to enforce 340B Program requirements that obligate pharmaceutical manufacturers to provide 340B Program prescription drug discounts to pharmacies contracted by 340B Program-participating hospitals to dispense 340B Program drugs.[1]
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As we begin the new year, we wanted to highlight two final developments from December 2020:
First, on Dec. 27, 2020, the stimulus legislation H.R. 133, the Consolidated Appropriations Act of 2021 (link), Pub. L. 116‑260 (Act), was signed into law. The Act includes several changes relevant to government price reporting. Some of the provisions were first introduced as part of S. 2543, the Prescription Drug Pricing Reduction Act of 2019 (link) (PDPRA) – the bipartisan drug pricing bill that was passed by the Senate Finance Committee in September 2019, but that was never voted upon by the Senate.
Evofem Biosciences Inc. (Nasdaq: EVFM) announced on Dec. 22 that it has entered into an agreement with the U.S. Centers for Medicare and Medicaid Services to participate in the Medicaid National Drug Rebate Program, providing access to Phexxi for the Medicaid population effective Jan. 1.
In May, the Food and Drug Administration approved Phexxi, Evofem’s non-hormonal prescription gel, for the prevention of pregnancy.
Medicaid provides health coverage to 69.8 million people in the United States, including approximately 25 million adult women. Medicaid is administered by states, according to federal requirements, where each state can determine specific coverage for Phexxi. Per the terms of the rebate program, states must generally cover a manufacturer’s drugs as of the mandatory effective date.
Dive Brief:
The Trump administration on Monday finalized a rule meant to make it easier for state Medicaid programs, commercial insurers and drugmakers to enter into value-based arrangements tying prescription drug payments to clinical outcomes.
The rule overhauls existing regulations that made structuring value-based payments difficult, the Centers for Medicare and Medicaid Services said. Under these types of deals, payers negotiate prices with drugmakers based on outcomes and evidence-based measures like reduced hospitalizations or lab visits, and aren t accountable for the full price if those measures aren t met.
The changes are effective in January 2022. CMS estimates that value-based drug deals emerging in the wake of the final rule could save federal and state governments up to $228 million through 2025.