Legal challenges to the 340B drug pricing program: administration, regulation, and reform

The 340B Drug Pricing Program ("340B Program") was created to help safety net hospitals and clinics "stretch scarce federal resources" by discounting the price of their outpatient drug purchases. The spread between the discounted price and the sales price of the drug is retained by the hospitals and clinics, subsidizing operational costs and funding services that would not otherwise be possible to provide. The 340B Program has grown dramatically since its inception, eliciting significant criticism and calls for reform. Many legal challenges against the 340B Program and the agency tasked with administering the program-the Health Resources and Services Administration (HRSA)-have been brought, highlighting the limitations in HRSA's powers. Specifically, HRSA's lack of broad regulatory authority has hampered its ability to oversee and reform the 340B Program. This article analyzes the litigation challenging the 340B Program-including cases regarding the orphan drug exclusion, the definition of a 340B patient, and the use of contract pharmacies-and explores the scope of HRSA's authority to regulate the 340B Program. In doing so, this article emphasizes the need for reforms to ensure that the 340B Program operates consistent with its congressional purpose and patients maintain access to safety net care across the country.