Skip to content

Menu

LexBlog, Inc. logo
NetworkSub-MenuBrowse by SubjectBrowse by PublisherJoin the NetworkGet StartedSubscribeSupport
Contact Us
Search
Close

340B Update: HRSA Notifies Six Manufacturers that They are in Violation of the 340B Statute

By Tiffany A. Hetland & Pete Enko on May 18, 2021
Email this postTweet this postLike this postShare this post on LinkedIn
Colorful of oral medications on dark background.

Since mid-2020, many pharmaceutical manufacturers have introduced policies that scope their offering of 340B pricing, including limiting contract pharmacy arrangements and requiring covered entities to submit claims data. These policies have generated a good deal of attention generally, and a significant number of covered entities have made attendant complaints to the Health Resources and Services Administration (HRSA).

On May 17, 2021, following an analysis of the covered entities’ complaints, HRSA’s Acting Administrator Diana Espinosa notified six pharmaceutical manufacturers that HRSA has determined their policies are in direct violation of the 340B statute. Common to all six letters is the following language:

[The drug manufacturer] must immediately begin offering its covered outpatient drugs at the 340B ceiling price to covered entities through their contract pharmacy arrangements…[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.[1]

Two policies are at issue across the six manufacturers:

  • Placing restrictions on 340B pricing to covered entities that dispense medications through pharmacies under contract, unless the covered entity lacks an in-house pharmacy
    • AstraZeneca Pharmaceuticals, LP
    • Eli Lilly and Company
    • Novo Nordisk Inc. and Novo Nordisk Pharma, Inc.
  • Placing restrictions on 340B pricing to covered entities that dispense medication through pharmacies, unless the covered entities provide claims data to a third-party platform
    • Novartis Pharmaceuticals Corporation
    • Sanofi
    • United Therapeutics Corporation

Each manufacturer must provide HRSA by June 1, 2021 with an update on its “plan to restart selling, without restriction, 340B covered outpatient drugs at the 340B price.”

HRSA’s May 17, 20201 announcement can be found here.

[1] If a manufacturer knowingly and intentionally charges a covered entity more than the ceiling price for a covered outpatient drug, it may be liable for a CMP of up to $5,000 per instance (over and above making the covered entity whole for the price differential).

Photo of Tiffany A. Hetland Tiffany A. Hetland

Tiffany’s practice touches all aspects of the rapidly changing healthcare delivery system, from medical care providers to hospitals, pharmaceutical manufacturers and insurance plans.

Email
Photo of Pete Enko Pete Enko

Healthcare clients depend on Pete for his valued advice in health law, information management, privacy and security matters. He frequently counsels clients on contracting, research compliance, fraud and abuse, managed-care, medical staffing, Medicare/Medicaid, patient care, operational and transactional issues.

Read more about Pete EnkoEmailPete's Linkedin Profile
  • Posted in:
    Health Care and Life Sciences
  • Blog:
    Healthcare Law Insights
  • Organization:
    Husch Blackwell LLP
  • Article: View Original Source

Call us at 1-800-913-0988 or email sales@lexblog.com.

Facebook LinkedIn Twitter RSS
  • About LexBlog
  • The Field We Built
  • Our Beliefs
  • Our Team
  • Contact LexBlog
  • Disclaimer
  • Editorial Policy
  • Terms of Service
  • Get Started
  • Publishing Solutions
  • Compass
  • Submit a Request
  • Support Center
  • System Status
Copyright © 2026, LexBlog, Inc. All Rights Reserved.
Law blog design & platform by LexBlog LexBlog Logo