Gilead Expanded Policy
Gilead expanded its existing restrictions on contract pharmacy arrangements, effective January 30, 2024, but only for covered entities that dispense 340B drugs through wholly-owned contract pharmacies. Gilead’s updated policy will apply its contract pharmacy claims submission restrictions to wholly-owned contract pharmacies.
Wholly-owned contract pharmacies are pharmacies that are owned by a covered entity or that share a common corporate parent. While we understand that most Ryan White Clinics do not have such pharmacies, Gilead’s expansion of its restrictions on contract pharmacy arrangements is still concerning. RWC-340B has publicly criticized Gilead for adopting such restrictions and for advancing studies undermining the 340B program.
Gilead’s branded hepatitis C products (HCV drugs) include Epclusa®, Harvoni®, Sovaldi®, and Vosevi®. Gilead currently allows “unlimited” use of third-party contract pharmacies but only if the covered entity submits claims data to 340B ESP for such pharmacies.
The new restrictions will require covered entities to submit claims level data for these HCV drugs dispensed through wholly-owned contract pharmacies. If a covered entity chooses not to share claims data and does not have an in-house pharmacy (other than a wholly-owned contract pharmacy), it can nominate the wholly-owned contract pharmacy or another contract pharmacy as its sole contract pharmacy. If the covered entity chooses not to submit claims data for its contract pharmacies, it is limited to only one such pharmacy and that pharmacy must be designated in 340B ESP.
Government Declines to Appeal Genesis Decision
HRSA declined to appeal the U.S. District Court for the District of South Carolina’s decision in the recently-decided case of Genesis Health Care, Inc. v. Beccera that challenged the enforceability of HRSA’s interpretation of “patient” within the meaning of the 340B program.
The case involved Genesis Health Care Inc., a community health center located in South Carolina, that decided to challenge HRSA’s longstanding position that a prescription must originate from services provided by a covered entity to be filled with 340B drugs. The court found that HRSA had overstepped its authority in interpreting the term “patient,” noting that Congress clearly intended that the term “patient” be broadly interpreted to effectuate the legislative intent of the 340B program.
RWC-340B held a members-only webinar on December 13, 2023, after the decision was released. RWC-340B members can access that webinar playback here.
By declining to appeal the decision, HRSA elected not to enforce its traditional interpretation of “patient” against the plaintiff in the case. The court noted that, when disputes arise in the future about the meaning of “patient”, HRSA can adjudicate those disputes through the Administrative Dispute Resolution (ADR) process. That process is currently unavailable to stakeholders because the final ADR rule has not been published yet. The Genesis decision is likely to take on more import as covered entities revisit their interpretation of patient definition in light of the decision and for policymakers considering changes to the program.
Leadership Change at OPA
LCDR Emeka Egwim, PharmD, RPh, stepped down from his position as the Director of OPA on December 2, 2023. Egwim departed OPA to begin a new role in HHS’s Office of the Assistant Secretary for Health. Chantelle Britton, previously a senior advisor in the Office of Special Health Initiatives, will serve as interim Director of OPA. Michelle Herzog will continue serving as Deputy Director of OPA. RWC-340B met with Dr. Egwim when he was appointed to the position and plans to request a meeting with the incoming Director of OPA.