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1 1 (October 13, 2022)

handle is hein.crs/govejaw0001 and id is 1 raw text is: Congressional ______ Research Service Courts Evaluate the Role of Contract Pharmacies in the 340B Drug Discount Program October 13, 2022 Congress created the 340B Drug Discount Program (340B) in 1992 through the Veteran's Health Care Act (P.L. 102-585) to enable safety net providers (those that provide health care services to uninsured, Medicaid and other vulnerable patients) to purchase drugs at lower costs. The U.S. Department of Health and Human Services' (HHS) Health Resources and Services Administration (HRSA) oversees the Program. The authorizing statute-Section 340B of the Public Health Service Act-requires drug manufacturers that participate in Medicaid to offer drugs to covered entities at discounted prices. Covered entities include Federally Qualified Health Centers, children's hospitals, and other providers that care for rural and underserved populations. Since its creation, Congress has expanded the Program several times. HRSA estimates that 340B sales constitute about 7.2% of the U.S. drug market, and reports that in 2020, total Program sales exceeded $38 billion. The majority of covered entities participating in the 340B Program do not have their own in house pharmacies but use contract pharmacies to ensure their patients have access to affordable outpatient medications. (A contract pharmacy is an outside pharmacy that is not owned or operated by the covered entity.) Since 2020, a growing number of drug manufacturers claim that covered entities' use of contract pharmacies has increased fraud and abuse and has resulted in duplicate discounts, which are prohibited by the 340B statute. As a result, several manufacturers have imposed price restrictions on covered entities that use contract pharmacies to purchase drugs. The restrictions have financial consequences on these providers, many of whom are now paying thousands of dollars more for 340B drugs. Some in Congress have encouraged HRSA to act on manufacturers' refusal to provide 340B discounts to covered entities that use contract pharmacies. For example, in July 2022, 181 Members of the House of Representatives signed a letter urging the agency to take quick action to protect the integrity of the program, and impose penalties on manufacturers who imposed conditions on contract pharmacies in violation of the 340B statute. Congressional Research Service https://crsreports.congress.gov LSB10842 CRS Legal Sidebar Prepared for Members and Committees of Congress

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