340B covered entities may experience expanded access to contrast media, radiopharmaceuticals and other products at 340B prices in the coming months. Buried in the over 1,600 pages of the Consolidated Appropriations Act, 2023 is a new law requiring the US Food and Drug Administration (FDA) to treat all contrast media, radiopharmaceuticals and over-the-counter (OTC) monograph drugs as “drugs.” As a result, certain products—notably some contrast media—that were previously classified as “devices” by the FDA will now be considered “drugs.”

This means that some products that were not previously available at 340B prices may now be. Specifically, products that were excluded from the 340B definition of “covered outpatient drug” because they did not go through the FDA drug approval process may eventually obtain drug approval and therefore qualify for 340B pricing. Further, going forward, new contrast media, radiopharmaceuticals and OTC monograph drugs will also be considered “drugs” and may meet the definition of “covered outpatient drug” for 340B pricing purposes. We expect the FDA to release guidance on the implementation of this new law. In the interim, there could be challenges in obtaining some of the products previously marketed as “devices.”

340B covered entities should review their current purchasing process for contrast media, radiopharmaceuticals and OTC monograph drugs that are not available through 340B accounts to determine which products may soon have 340B prices available. Additionally, 340B covered entities should review their policies and procedures and make any updates that may be necessary because of this new law and note [...]

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Earlier today, the US Court of Appeals for the Third Circuit issued a much-anticipated decision in one of the 340B contract pharmacy cases. The decision is a win for drug manufacturers who have sought to restrict access to 340B prices on drugs dispensed through contract pharmacy arrangements.

The Court found that the 340B statute does not require delivery of 340B drugs to an unlimited number of contract pharmacies because (1) the text of the statute is silent about delivery, (2) structural clues confirm that the statute does not require unlimited delivery, and (3) neither drafting history nor legislative purpose compels a different result.

Additionally, the Court found that the 340B Administrative Dispute Resolution Rule that was published in December 2020 is lawful. The US Department of Health and Human Services has since published a new proposed rule that would replace the December 2020 one.

This is the first of three decisions in 340B contract pharmacy appeals cases. The remaining two are expected at any time. We are continuing to track more than 40 cases in courts across the country related to a wide range of 340B program issues. Our summaries are compiled in the 340B Litigation Tracker, a subscription product from McDermott+Consulting.