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Legal Insights and Perspectives for the Healthcare Industry

As reported in As Prescribed, US President Donald Trump signed four executive orders implementing policies on drug pricing on July 24. One of the orders directs the secretary of the US Department of Health and Human Services (HHS) to condition future grants under Section 330(e) of the Public Health Service Act on Federally Qualified Health Centers establishing practices that ensure the 340B discount they receive on insulin and injectable epinephrine is passed through to low-income patients who lack insurance or have high copays or deductibles. The HHS secretary has discretion to set the standard for eligible patients.

In the blog post, Morgan Lewis senior counsel Donna Yesner reports that this policy is limited in scope to one category of covered entities—it does not extend to hospitals—and two categories of drugs, but is consistent with the legislative intent of the 340B program to make outpatient drugs accessible to poor and uninsured or underinsured patients of federal grantees. But, as with other drug pricing executive orders, there could be problems carrying out the 340B directive.

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We address more than a dozen key proposals from the CMS outpatient prospective payment system (OPPS) and ambulatory surgical center payment systems proposed rule in a recent LawFlash. Chief among them is the agency’s bold new proposal for a broad price transparency program. Other notable proposals include continuing payment reductions for 340B drugs and grandfathered off-campus provider-based departments, both the subject of pending litigation in federal court. CMS is soliciting public input on a multitude of proposals from this rule, and comments are due September 27, 2019. Hospitals will want to carefully assess these changes and consider submitting comments before these proposals become final rules.

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