340B Program Update

The new year has already gotten off to a busy start for health care providers that participate in the 340B Drug Pricing Program ("340B Program") and government agencies that reimburse these providers. Following on the heels of the publication of a Medicaid Covered Outpatient Drug Final Rule ("Final Rule"), the Centers for Medicare and Medicaid Services ("CMS") recently issued a guidance letter discussing implementation of the Final Rule and informing state Medicaid directors that, under the Final Rule, they should pay 340B Program entities no more than the 340B ceiling price (plus appropriate dispensing fees) for drugs purchased at 340B Program pricing. The Final Rule and the guidance letter could lead to reductions to 340B Program covered entities in some states, at the same time that Congress is considering MedPAC's recent recommendations to reduce Medicare Part B payments for 340B Program covered entity hospitals. In addition, the White House has proposed a federal