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June 340Buzz: Are you on the 340B energy bus?

As we approach mid-year 2021 — in the second year of a worldwide pandemic, amidst a polarized political environment fraught with negativity, ill-will and energy vampires of every stripe — there are still many reasons to stay positive, energized and even optimistic about the work we’re doing and the people we’re serving under the 340B program. Sounds counterintuitive, right?! It’s really not, but it does depend on your perspective.

In The Energy Bus: 10 Rules to Fuel Your Life, Work, and Team with Positive Energy, author Jon Gordon tells the parable of an “Energy Bus” whose driver and passengers teach other riders how to overcome personal and work issues using positive energy and an optimistic outlook. The moral of the story is that your happiness is fueled by positive energy, and your desire, vision and focus move you in the right direction. It’s an inside job and you’re the “driver” of the bus.

Keep this construct in mind as we take a ride on the 340B Energy Bus and see how June has us moving in the right direction on the road ahead.

The Courts

The supremes have spoken — In perhaps the most consequential news of the month for the 340B program, the U.S. Supreme Court ruled 7-2 to uphold the Affordable Care Act (ACA) for the third time, saying that the plaintiffs did not have the standing to challenge the legality of the ACA. Most experts agree that the major tenets of Obamacare and the 340B program would appear to be secure for the foreseeable future and that if the fundamentals of the law were to be changed, it would require Congressional legislation to do so.

DOJ tells court that pharma’s 340B contract pharmacy limits are costing providers $3.2 billion a year — Six drug manufacturers’ denials of 340B pricing on drugs shipped to contract pharmacies, hospitals, health centers and clinics are costing these providers a projected $3.2 billion a year in 340B program savings, the federal government said in a June 16 brief in a Sanofi lawsuit challenging HHS 340B contract pharmacy requirements. Prior to this disclosure, no one had officially tallied the cost of these manufacturers’ malfeasance, and it is truly an eye-opener.

The Administration

The Administration

HHS withdraws controversial advisory opinion — HHS withdrew a controversial advisory opinion it had issued in mid-May that stated drug makers must provide products discounted under the 340B program to contract pharmacies. It did not withdraw a series of letters it sent to AstraZeneca and five other lawmakers calling for them to end the restrictions to contract pharmacies and applying monetary penalties if they do not. The advisory opinion was at the heart of a lawsuit filed by AstraZeneca that argued the advisory opinion violated federal law and HHS didn’t have the statutory authority to issue it. The agency said that it was pulling the advisory opinion issued last year by the HHS Office of the General Counsel (OCG) to “avoid confusion and unnecessary litigation.” With the AstraZeneca lawsuit now technically moot, drug manufactures will likely shift their grievances to the 340B Administrative Dispute Resolution (ADR) board and/or file new lawsuits on different grounds.

Biden proposes to rescind insulin rule — The Biden administration formally announced plans to rescind the Trump administration’s controversial final rule requiring community health centers to pass along all 340B drug discount savings on insulin and injectable epinephrine to low-income patients as a condition for keeping their federal health center program grants. HHS has just published a Notice of Proposed Rulemaking (NPRM) with a 30-day comment period to officially rescind the rule. Biden paused the rule in January and March until July 20.

Biden’s proposed 2022 budget has been published — Interesting highlights include expanding HHS’s general 340B authority to reform the program, with suggested language to allow them to audit a covered entity with the purpose of reviewing how 340B benefits are being utilized. In addition to regulatory authority, a $7 million dollar request for funds includes a proposal for two additional full-time equivalents to support additional audits (225 audits per year compared to 200 for covered entities and 10 manufacturer audits per year as compared to 5 currently). The budget also requests additional resources to roll out the ADR rule and resources to assist with launching the Office of Pharmacy Affairs Information System (OPAIS) upgrades, which include increased education on compliance and oversight activities.


• Chiquita Brooks-LaSure was formally sworn in as Administrator of the Centers for Medicare and Medicaid Services (CMS), establishing another key Biden administration official with influence on the 340B program.

• On June 14, the U.S. Senate confirmed President Biden’s nomination of Ketanji Brown Jackson, the federal district judge who has been assigned to two closely watched 340B-related lawsuits, for a seat on the U.S. Court of Appeals for the District of Columbia circuit. Jackson was selected to fill the seat of Merrick Garland, who was confirmed by the Senate in March to serve as Biden’s attorney general. The D.C. appellate court is widely considered to be a grooming spot for future Supreme Court justice selections, and Biden has promised he will appoint a Black female justice if he gets the opportunity to do so. Ms. Jackson is considered a top nominee for such a position.

• On June 18, President Biden nominated career civil servant Christi Grimm to serve permanently as Inspector General of HHS. She has been performing the duties of the Inspector General since January 2021. Her nomination must be confirmed by the U.S. Senate.

• Based on recommendations from the OGC, CMS and HRSA, on June 21, President Biden made eight, two-year appointments to the 340B ADR board, which is responsible for managing the binding 340B ADR process for specific disputes arising under the 340B program.

The Legislature

Continued state engagement on protecting the 340B program — There are now more than a dozen states with 340B anti-discriminatory protections in place to address 340B discriminatory pricing practices by third-party payers and pharmacy benefit managers (PBMs). Some of these state laws also address drug manufacturers denying access to 340B pricing at contract pharmacies. Supporters of the 340B drug pricing program are ramping up their efforts to align increasing support for protective laws, and we believe this trend could lead to a federal engagement, legislatively, to do the same on a national level.

As you can see, there are a lot of positive activities in support of the safety net that sustains the health and dignity of the people in our communities. As always, whatever challenges the industry faces, Sentry will be there along the way as a voice for covered entities and to support you in your effort to optimize the 340B program and serve its vulnerable patients.

Stay optimistic. Stay positive. And let’s have the ride of our lives!

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