As Prescribed

340B litigation remains full speed ahead. Manufacturer and covered entity (CE) disputes, not all of which are being actively litigated, include, but are not limited to, federal and state regulation of contract pharmacies, manufacturer restrictions on contract pharmacies and 340B distribution, CE data submission requirements, and the definition of “patient.” With billions of dollars at stake, it is unlikely that manufacturers or CEs will change course any time soon. And while federal and state legislation has been proposed to address these issues, we cannot know whether such legislation will be enacted.

In response to rising prescription costs and overall state-level healthcare spending, numerous states, including Maryland and Oregon, have established prescription drug affordability review boards (PDABs) to review certain high-cost prescription drugs and determine if states should take action to reduce those prices.

Aiming to expedite drug development, enhance the body of clinical evidence supporting new and existing therapies, and improve participation and diversity in clinical trial populations, the US Food and Drug Administration (FDA) recently issued three guidance documents that impacted the clinical trial landscape and established a new hub for clinical trial innovation.

While audits are part of doing business in the ordinary course, businesses are generally less than eager to open the books. And the same is true when it comes to the 340B Drug Pricing Program. Audits are now making the list of ongoing disputes between manufacturers and covered entities (CEs) participating in the program.

Recognizing the importance of diversity and inclusivity in clinical trials, drug development, and regulatory decision-making, Congress amended the Federal Food, Drug, and Cosmetic Act (FDCA) in connection with the Food and Drug Omnibus Reform Act (FDORA) provisions of the Consolidated Appropriations Act of 2023, requiring sponsors of certain clinical studies of drugs, biological products, and medical devices to submit Diversity Action Plans to the FDA (FDCA Sections 505(z) and 520(g)(9)).

In what can only be characterized as a necessary but significant proposed departure from current political initiatives focused on lowering pharmaceutical drug prices, the Centers for Medicare & Medicaid Services (CMS) proposes considerably increasing reimbursement for certain qualified diagnostic radiopharmaceuticals.

Medicare Part B enrollees as of July 1, 2024 will experience savings on coinsurance for 64 drugs selected by the Biden administration. Pursuant to the Inflation Reduction Act and its Medicare Prescription Drug Inflation Rebate Program, these select drugs will have a lower coinsurance rate through September 30, 2024 to adjust for drug prices rising faster than the rate of inflation. The anticipated savings are substantial, especially with more than 750,000 Medicare beneficiaries using these drugs annually and another 300,000 individuals qualifying for expanded benefits under the Low Income Subsidy program.

Taking a step toward fulfilling its requirements under Section 506K of the Federal Food, Drug, and Cosmetic Act (Section 506K), FDA has issued Draft Guidance describing how the agency intends to implement the Platform Technology Designation Program. Section 506K was established by Section 2503 of the Prepare for and Respond to Existing Viruses, Emerging New Threats, and Pandemics Act of 2022 and enacted as part of the 2023 Consolidated Appropriations Act.

Pharmaceutical drug pricing and reimbursement continues to make headlines nationwide. In a recent development, Maryland’s Prescription Drug Affordability Board (PDAB) finalized its list of selected drugs for affordability review. The board will engage in what it contends will be a comprehensive “cost review” where it will seek public comments, additional information, and data over a 60-day period to determine if the selected drugs will be subject to state-prescribed upper payment limits.

In what is being touted as a significant win for pharmaceutical drug manufacturers, the DC Circuit affirmed on May 21, 2024 that Section 340B of the Public Health Service Act does not categorically prohibit manufacturers from imposing distribution restrictions on covered drugs to covered entities. By rejecting the US government’s position that the 340B Drug Pricing Program categorically prohibits manufacturers from imposing any contractual conditions on the distribution of covered outpatient drugs, the court opened the door for new contract relationships between program manufacturers and covered entities.