In a significant decision, the U.S. District Court for the District of South Carolina invalidated the Health Resources and Services Administration’s (HRSA’s) definition of “patient” in regards to the 340B Drug Pricing Program. The much-awaited judgement on November 3, 2023, came in the case of Genesis Health Care, Inc. v. Becerra, which dates back to 2017.
Genesis had alleged that HRSA’s definition of “patient” contradicted the plain statutory language, as it “improperly focused on a patient’s prescription, and who wrote it”. The company maintained that this definition has “never been formally introduced as a regulation”. The court ruling supports Genesis’s assertion, thus raising questions about the scope of the 340B program.
The pivotal legal battle against HRSA centred on the way a “patient” is defined for the purposes of the 340B Drug Pricing Program – a federal scheme that allows qualifying hospitals and healthcare providers to purchase outpatient drugs at significantly reduced prices. The decision rendered by the District Court will likely influence operations of many corporations and law firms, prompting them to reconsider their application of the 340B program.
While this decision signals a major turning point, it is vital to keep in mind that the scope of impact and the future steps of HRSA following the court’s decision remain unclear. It is yet to be clarified how the decision will affect healthcare providers’ eligibility to participate in the 340B program and whether HRSA will seek an appeal or future rulemaking to redefine the term “patient”.
It is advised that all entities eligible for participation in the 340B Program, including hospital systems, healthcare clinics, and other healthcare providers, continue to keep a watchful eye on the developments surrounding this case.
For professionals involved in healthcare and pharmaceutical law, this ruling acts as an intriguing highlight, reflecting constant evolution and change within the legal and healthcare landscapes. It also leaves the door open for further clarifications and changes to the statute, dependent upon HRSA’s response.
Further details on the case and this decision can be found in the full discussion by Foley Hoag LLP on JD Supra.