Pharmaceutical Manufacturers Must Submit 340B Ceiling Prices Starting in the First Quarter of 2019

By David C. Gibbons & Alan M. Kirschenbaum — Beginning February 15, drug manufacturers will have a new price to report to the Federal government: 340B ceiling price.  Under Section 340B of the Public Health Service Act, a manufacturer of covered outpatient drugs, as a condition of having its drugs be eligible for federal payment under Medicaid and Medicare Part B, to enter into a Pharmaceutical Pricing Agreement with the Department of Health and Human Services (“HHS”). Under the agreement, the manufacturer is obligated to charge no more than a statutorily defined ceiling price (the “340B ceiling price”) to certain types of purchasers (called “Covered Entities”), which include certain types of clinics that receive federal funding and certain types of hospitals.  Since the creation of the 340B program in 1992, drug manufacturers have been required to calculate the 340B ceiling price so that they can charge Covered Entities…

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