eligibility based on administrative services alone.115 This records-related
change further solidifies the need for a nexus between covered entity services
and the prescription of 340B drug.
The proposed MegaGuidance does not reference income or insurance
status as a qualifying factor of the patient.116 There are groups who advocate
for limiting 340B drugs to uninsured patients only, which would significantly
cut 340B savings for covered entities and, therefore, curtail the growth of
safety net programs associated with such savings. It is very unlikely that
HRSA would adopt such an extreme position as limiting 340B to uninsured
patients in the final MegaGuidance.
C. Enforcement and Sanctions under the 340B Program
Historically, the 340B Program operated with little government oversight,
partly due to the lack of enforcement measures within the statute as well as
the lack of funds for OPA to regulate the participants. Accordingly, OPA
relied on participants’ certifications upon enrollment and subsequent self-
policing.117 The authorization of contract pharmacy arrangements in 2010
opened the door to more players in the game, which increased the financial
pinch that pharmaceutical manufacturers felt.118 Proportionate to the cost of
the 340B Program to manufacturers has been the volume of their voice on
Capitol Hill. Manufacturers – often through the organization Alliance for
Integrity and Reform of 340B (also known as AIRx 340B) – have called on
Congress to reign in 340B.119 Through the ACA, Congress established new
sanctions for 340B Program violations.120
Pursuant to the ACA amendments to the 340B Program, failure to comply
with 340B policies may lead to corrective action, including having to issue
refunds to manufacturers, with interest, and being excluded from the 340B
Program altogether.121 HRSA may remove a covered entity from the 340B
Program if a violation was “systematic and egregious as well as knowing and
intentional.”122 In addition to penalties applicable under Section 340B itself,
a violation of 340B requirements may subject a community health center to
civil and criminal sanctions under many federal laws. Generally speaking,
the laws the government would likely invoke for a 340B Program violation
117. GAO 2011 REPORT, supra note 8, at 21.
119. See Core Principles, ALLIANCE FOR INTEGRITY AND REFORM OF 340B (2013),
120. Patient Protection and Affordable Care Act, Pub. L. No. 111-148, § 7102(a), 124
Stat. 119, 821 (2010).
121. See § 256b(d)( 2)( B)(v).