Since 2020, several major drug manufacturers have implemented policies that restrict covered entities’ access to 340B pricing for drugs dispensed through contract pharmacy arrangements. These restrictions typically take the form of requiring covered entities to use only one contract pharmacy, limiting 340B pricing to specific contract pharmacy chains, or requiring covered entities to submit claims data as a condition of receiving 340B pricing.
These manufacturer restrictions have been highly controversial and have been the subject of extensive federal litigation. Some federal courts have ruled that certain manufacturer restrictions violate the 340B statute; others have found some restrictions permissible. HRSA has taken the position that manufacturer restrictions violate covered entities’ statutory rights under the program.
For covered entities, manufacturer restrictions represent a direct threat to program savings—particularly for FQHCs and other safety-net providers that rely heavily on contract pharmacies to serve their patient populations. Navigating these restrictions requires understanding the current legal landscape, evaluating which manufacturers have imposed restrictions, and developing strategies to mitigate their impact.
Frequently Asked Questions
What are manufacturer restrictions in the 340B program?
Manufacturer restrictions are unilateral policies implemented by some drug manufacturers that limit covered entities' access to 340B pricing for drugs dispensed through contract pharmacies. They may restrict the number of contract pharmacies, require specific pharmacy chains, or condition pricing on data submission.
Are manufacturer restrictions legal?
This is actively contested. Federal courts have issued conflicting rulings. HRSA has taken the position that manufacturer restrictions violate covered entities' statutory rights. The legal landscape continues to evolve, and covered entities should monitor developments closely.
How can covered entities respond to manufacturer restrictions?
Options include participating in industry advocacy, monitoring litigation developments, working with TPAs to optimize access within restriction parameters, and evaluating whether to pursue ADR for improperly denied 340B pricing. Consulting with a 340B expert is recommended.
Why Manufacturer Restrictions (340B) Matters
Manufacturer restrictions have reduced 340B savings for many covered entities, particularly those relying on multiple contract pharmacies. The legal and regulatory landscape is evolving, and covered entities need current guidance on how to respond to restrictions affecting their programs.
How Virtue 340B Uses It
Virtue 340B helps covered entities understand how manufacturer restrictions affect their specific programs, evaluate their options for responding, and develop strategies to mitigate the impact on savings while maintaining compliance.
