As Prescribed

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.

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.

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.

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.

At a time when pharmaceutical drug prices are at the height of political scrutiny, manufacturers can breathe a small sigh of relief as the Centers for Medicare and Medicaid Services (CMS) announced on May 15, 2024 that it will not, at this time, finalize its best price stacking provision in its May 23, 2023 Medicaid Drug Rebate Program (MDRP) proposed rule.

Pharmaceutical drug pricing and reimbursement remains a bipartisan focus as we draw closer to the November presidential elections, with politicians remaining steadfast in their efforts to turn up the heat on pharmaceutical manufacturers. Politicians and other groups from across the political spectrum have coalesced around a 40-year-old statute known as the Bayh-Dole Act—intended to facilitate the public’s beneficial use of patented inventions by securing intellectual property (IP) rights for inventors—and are seeking to transform the statute’s never-before-used “march-in” rights to influence the price of drug products.

2024 is shaping up to be a big year for prescription drug affordability boards (PDABs). Like state price transparency reporting laws, state legislation establishing PDABs continues expansion. In response to rising prescription costs and overall state-level health care spending, numerous states have established PDABs to review certain high-cost prescription drugs and determine if states should take action to reduce those prices.

Effective April 1, 2024, California will expand its existing prescription drug price transparency requirements by enacting legislation to amend and clarify requirements on wholesale acquisition cost increase reporting and notice submissions as well implement further processes for manufacturer penalty hearings.

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 (FQHCs) 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 co-pays or deductibles. The HHS secretary has discretion to set the standard for eligible patients.