2023 Industry Year in Review

January 16, 2024

Regulations and announcements impact our industry every day, and 2023 was no exception. Here’s a recap of some of the major developments affecting Covered Entities this past year:  

Contract Pharmacy Restrictions 

Perhaps the most significant occurrence affecting Covered Entities and the 340B program in 2023 was the prevalence of contract pharmacy restrictions, as over 20 drug companies began placing conditions on 340B pricing. These restrictions, including limiting to one contract pharmacy, distance requirements between pharmacies and hospitals, and the refusal to offer 340B prices led to the inability to use specialty drugs, added costs of contracting with outside specialty pharmacies, growing contract pharmacy deserts, and ultimately fewer 340B scripts.   

HRSA Updates  

HRSA issued a public notice in October regarding its child site policy, stating that hospitals using 340B in offsite locations that are not yet registered with OPAIS will be at risk of audit findings if they continue without meeting transition period requirements. This transition period allows hospitals to continue using 340B drugs if they meet the requirements outlined in the notice.  

Approximately 60 hospitals also received compliance letters from HRSA requesting follow-up information about hospital child sites and patient eligibility in early 2023. HRSA later cited these letters as justification to revert to a pre-COVID policy of prohibiting the use of 340B in new child sites not yet on a cost report. 

Inflation Reduction Act 

The Inflation Reduction Act (IRA) required CMS to negotiate prices on specific high-cost, single-source Medicare Part D and Part B drugs. The process is underway for the first 10 Part D drugs chosen, and the pricing CMS ultimately sets for those drugs will go into effect in 2026. These 10 drugs account for 20 percent of gross Medicare Part D drug costs. 

Depending on the drug’s age, negotiated prices will sit at 25, 35, or 60 percent discounts compared to 2021.  

Overcharge Refunds 

Multiple drugmakers have begun offering refunds to some 340B Covered Entities for 340B overcharges, as many recalculate 340B ceiling prices due to revisions made to Medicaid pricing data. These refunds have mainly applied to certain covered outpatient drugs and were calculated and automatically issued through wholesalers to affected entities.  

Our goal is to support clients as they adapt to this ever-changing environment, and we will continue to do so in 2024. As always, please speak with your Account Managers or contact us with any questions. 

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