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BREAKING: HHS Says 340B Discounts Apply to Contract Pharmacies

HHS Says 340B Discounts Apply to Contract Pharmacies

Drug manufacturers must deliver 340B drug discounts on covered outpatient drugs “when contract pharmacies are acting as agents of 340B covered entities,” the U.S. Health and Human Services Department (HHS) Office of General Counsel said today in an advisory opinion.

“Although advisory opinions do not carry the force of law, they set out the agency’s current views on issues,” HHS said in a news release. “Those views may be reflected in the various regulatory, enforcement, and oversight powers the federal government has to run the 340B Program.”

“HHS has become aware of drug manufacturers refusing to provide 340B discounts to covered entities when covered entities order the drugs themselves but then have the drug physically delivered to patients through ‘contract pharmacies,’” HHS said. “Through the new advisory opinion, HHS has clarified that drug manufacturers must provide 340B discounts when a contract pharmacy is acting as an agent of a covered entity, providing services on behalf of the covered entity.”

340B providers, bipartisan members of Congress, and state attorneys general have urged HHS Secretary Alex Azar to act. There are currently three lawsuits against the administration attempting to force the government to act. It appears to have been effective.

“President Trump has been steadfastly devoted to lowering drug prices for American patients, and that includes ensuring that drug companies are offering the discounts they’re legally required to give to providers that serve the vulnerable,” said HHS Secretary Alex Azar. “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.”

It is unclear whether drug manufacturers Eli Lilly and Co., AstraZeneca, Sanofi, Novartis, United Therapeutics, and Novo Nordisk will now provide the discounts.

This is a developing story. We will report in greater depth later today about the advisory opinion’s content and fallout.

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