Pennsylvania Rescinds New Policy Impacting 340B Savings – Workgroup Will Convene To Discuss Further Changes To The 340B Program in Pennsylvania

As previously discussed in our January 5, 2023 legal alert, the Pennsylvania Department of Human Services (“Pennsylvania DHS”) issued a Medical Assistance Bulletin (the “Bulletin”) in late December, 2022 that had the potential to put 340B savings at risk in Pennsylvania. The new policy would have prohibited 340B Program covered entities and their contract pharmacies from dispensing 340B medication to Pennsylvania Medicaid patients, regardless of whether the patient is enrolled in fee-for-service or managed Medicaid.  The Bulletin became effective on January 1, 2023 (a mere ten days after it was initially announced).  As a result, Pennsylvania-based covered entities and contract pharmacies immediately began scrambling to comply with the unexpected announcement. It also forced them to simultaneously develop alternative care delivery plans to account for the detrimental decreases in availability of 340B program discounts caused by the new policy. 

The significant impacts of the new policy announced in the Bulletin, prompted several covered entities and contract pharmacies (collectively the “Stakeholders”) to voice their concerns. They questioned the authority of the Pennsylvania DHS to hastily implement the policy change.  Specifically, the Stakeholders noted that the new policy:  (1) was enacted without going through the formal regulatory policy required under Pennsylvania law (which would have provided Stakeholders with opportunity to comment and provide suggestions on the sudden policy change) and (2) created inconsistencies with federal law and previous guidance issued by the Pennsylvania DHS (specifically the 340B Program’s interrelationship with the Medicaid Drug Rebate Program). 

As a result of these discussions, and the concerns of the Pennsylvania DHS and the Stakeholders, on January 19, 2023, the Pennsylvania DHS issued a Supplemental Medical Assistance Bulletin (the “Supplemental Bulletin”). The Supplemental Bulletin rescinded the new policy established in the original.  In doing so, the Pennsylvania DHS committed to convening a workgroup in the next few weeks for the purpose of developing a potential solution. Such a solution will allow for the appropriate identification and recognition of medications dispensed to Pennsylvania Medicaid patients through contract pharmacies. 

We are happy to speak with you if you are part of a covered entity or contract pharmacy that participates in the 340B Program in Pennsylvania.  If you would like more information on the ongoing discussions associated with the potential changes to the 340B Program in Pennsylvania, please contact Bryan Murray or one of your Dinsmore healthcare lawyers.