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A Win for the 340B Community:The recent court ruling in Genesis Health Care

Updated: Nov 8, 2023

11.3.23 Order Granting Genesis Summary Judgment
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The recent court ruling in Genesis Health Care, Inc. v. Becerra is a major victory for covered entities participating in the 340B Drug Pricing Program.

The 340B Program allows certain safety net providers like Community Health Centers, children's hospitals, and critical access hospitals to purchase outpatient drugs at a discounted rate. This enables these organizations to "stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."

However, the Health Resources and Services Administration (HRSA) had been interpreting the term "patient" in a way that restricted which individuals covered entities could provide discounted drugs to. HRSA claimed a patient was only eligible if the prescription originated from the covered entity.

Genesis Health Care, a Community Health Center, challenged this interpretation. They argued HRSA's definition went beyond the plain language of the 340B statute and frustrated the purpose of the program.

The court agreed with Genesis. It found that nothing in the statute conditions patient eligibility on where a prescription originated. The only requirement is that the individual be a "patient" of the covered entity.

By rejecting HRSA's restrictive definition, the court upheld the original intent of the 340B Program. Covered entities can now operate their pharmacies more profitably and use the savings to serve more low-income patients in their communities.

This is a major win that will allow safety net providers to continue stretching limited healthcare dollars and fulfilling their mission of improving access to care. The 340B Program is more important than ever, and this decision ensures it can operate as Congress intended.

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