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340B Drug Pricing Program

HRSA Determines Six Pharmaceutical Manufacturers Are In Violation of the 340B Statute

Today, 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.

COVID-19 Resources

HRSA is working to keep 340B Program participants and stakeholders updated on the latest information regarding the coronavirus disease 2019 (COVID-19). All COVID-19 information related to the 340B Program will appear on the COVID-19 Resources page, and we will update resources as they become available.

In response to the COVID-19 pandemic, HRSA is allowing some entities, upon request and review, to immediately enroll into the 340B Program. HRSA will post a supplemental Medicaid Exclusion File (MEF) (XLSX - 117 KB) every Friday, beginning April 10, 2020 that includes a list of entities who have been approved for immediate enrollment. This list is in addition to the quarterly MEF posted on the 340B Office of Pharmacy Affairs Information System.

The 340B Program enables covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.

Manufacturers participating in Medicaid agree to provide outpatient drugs to covered entities at significantly reduced prices.

Eligible health care organizations/covered entities are defined in statute and include HRSA-supported health centers and look-alikes, Ryan White clinics and State AIDS Drug Assistance programs, Medicare/Medicaid Disproportionate Share Hospitals, children’s hospitals, and other safety net providers. See the full list of eligible organizations/covered entities.

To participate in the 340B Program, eligible organizations/covered entities must register and be enrolled with the 340B program and comply with all 340B Program requirements. Once enrolled, covered entities are assigned a 340B identification number that vendors verify before allowing an organization to purchase 340B discounted drugs.

Accessibility*

If you use assistive technology, you may not be able to fully access information in this file. For assistance, please email 340B-Communication@hrsa.gov.

Date Last Reviewed:  May 2021