A federal program established over 30 years ago to provide discounted drugs to low-income and uninsured patients is anticipated to face several circuit court decisions in 2024, potentially changing its landscape. The 340B Drug Pricing Program was created in 1992 by Congress to allow covered entities such as qualifying safety-net hospitals, clinics, and other providers to purchase outpatient drugs at discounted prices from participating manufacturers. These discounts, which average 25%-50%, enable providers to offer free or low-cost drugs to uninsured and underinsured patients as well as extend care to more people. However, differences have arisen between drugmakers and health-care systems regarding the program’s integrity and how discounts are used. This has led to lawsuits that are expected to continue into the new year.
The pending court cases and administrative rules in 2024 could significantly change the program’s operations and who benefits from it. More than 2,600 US hospitals, representing over a third of them, participate in the program, according to the US Government Accountability Office.
The program faces challenges in various areas, including manufacturer restrictions on the distribution of discounted drugs to multiple and unlimited contract pharmacies, state laws regarding drug distribution in the program, court cases pertaining to the eligibility of patients, and potential administrative rule changes. Additionally, lawmakers have shown interest in making changes and updates to the 340B program.
Court cases related to the distribution of discounted drugs to contract pharmacies and state laws governing drug distribution are pending in various circuit courts. The results of these cases can have significant implications for the program. A recent decision from the US District Court regarding the eligibility of 340B-eligible patients could also impact the program’s operations, and a final rule on the administrative dispute resolution process is expected to be released soon.
In addition to court cases and administrative rules, lawmakers have proposed changes through bills and investigations. The PROTECT 340B Act (H.R. 2534), which would prohibit pharmacy benefit managers and health insurers from discriminating against providers in the 340B program, was introduced in April 2023. Sen. Bill Cassidy has also opened an investigation into the program’s operations.
Overall, the 340B program is expected to face significant challenges and potential changes in 2024, with court decisions, administrative rule changes, and legislative proposals all playing a role in shaping its future.