Eleven items this cycle, most of them about the widening fight between drug manufacturers, PBMs, and the pharmacies and covered entities caught in between. 340B claims-data mandates keep expanding, a federal appeals court weighed in on manufacturer rebate models, and CVS is facing scrutiny on two fronts at once. Nothing new from the California Board of Pharmacy this cycle, and none of this week’s federal enforcement bulletins named a pharmacy.
CVS Rewrites Its 340B Contract Pharmacy Agreements and Sends Termination Notices
CVS is revising its Pharmacy Services Agreements for 340B contract pharmacy arrangements and sending termination notices to some covered entities, all while facing federal lawsuits alleging it withheld 340B revenue that belonged to hospitals and other covered entities. Any covered entity or specialty pharmacy with a CVS contract-pharmacy relationship should read the new terms carefully before signing anything. Read more at Frier Levitt →
Johnson & Johnson Joins the Manufacturer 340B Claims-Data Push
Johnson & Johnson has joined Eli Lilly, Exelixis, and Novo Nordisk in requiring covered entities to submit claims-level data before honoring 340B pricing, and in limiting most covered entities to a single contract pharmacy within 40 miles of the parent site. Eli Lilly is separately defending its own version of this policy in court, moving to dismiss a lawsuit from Tampa General Hospital over the same issue. Any covered entity or affiliated pharmacy relying on 340B pricing should check its data readiness now, before a manufacturer’s deadline arrives. Read more at Frier Levitt →
D.C. Circuit Rules Manufacturers Need HRSA’s Approval Before Adopting a 340B Rebate Model
The D.C. Circuit Court of Appeals has ruled that drug manufacturers cannot unilaterally replace upfront 340B discounts with a rebate model without first getting approval from the Health Resources and Services Administration. The decision closes off one path manufacturers had been testing to reshape how 340B pricing works, and it narrows how much latitude HRSA’s own revised rebate pilot program can offer going forward. Read more at Frier Levitt →
FTC’s Settlement with Caremark Could Open the Door to Cost-Plus Reimbursement
The Federal Trade Commission’s settlement with Caremark could create an opening for community pharmacies, pharmacy services administrative organizations, and wholesalers to move toward a cost-plus reimbursement model. What “cost-plus” will actually mean in practice, and how much it will pay, remains an open question worth watching closely before anyone relies on it as a bargaining position. Read more at Frier Levitt →
Health Plans Can Be Real Parties in CVS’s Usual and Customary Pricing Litigation
A ruling in the ongoing litigation over CVS’s Usual and Customary pricing practices found that self-funded health plans can be considered real and substantial parties to the case when they bear the financial risk for the alleged overcharges. That distinction matters for any plan sponsor weighing whether it has standing to pursue a PBM over similar billing practices. Read more at Frier Levitt →
Federal Court Blocks Illinois PBM Reporting Law on ERISA Grounds
A federal court has enjoined Illinois from enforcing key reporting requirements of its Prescription Drug Affordability Act against pharmacy benefit managers, ruling that the requirements are preempted by ERISA as applied to employer health plans. States with their own PBM transparency laws, California included, should watch how this argument plays out, since a PBM facing similar reporting obligations elsewhere could raise the same challenge. Read more at Frier Levitt →
FDA Warning Letter Signals a New Enforcement Theory for Compounded GLP-1 Combinations
The FDA issued a warning letter to Empower Pharmacy over its compounding of tirzepatide and semaglutide combined with additional ingredients such as vitamin B12 or niacinamide, applying a new theory for pursuing compounded GLP-1 combination products. Any pharmacy compounding GLP-1s with added ingredients should take note of the agency’s reasoning here. Read more at Frier Levitt →
Lilly Sues Sellers of Unapproved Retatrutide
Eli Lilly has filed suit against sellers of research-use-only retatrutide, extending the same enforcement pattern now showing up against compounded GLP-1 products more broadly, one built on private litigation rather than a formal FDA action. Pharmacies compounding peptide products should watch both fronts, regulatory and private, as this area continues to draw scrutiny. Read more at Frier Levitt →
Mallinckrodt Restricts Pharmacy Controlled Substance Purchases Without Warning
Some pharmacies are finding that Mallinckrodt and certain wholesalers have restricted their controlled substance purchasing privileges with little or no advance notice. Strong, well-organized compliance documentation is often what gets purchasing privileges reinstated, so any pharmacy that orders controlled substances from these suppliers should have its records in order before a problem arises. Read more at Frier Levitt →
PBM Audits Are Targeting Pharmacy-to-Pharmacy Inventory Transfers
Pharmacy benefit managers are increasingly requesting Drug Supply Chain Security Act transaction documentation for inventory transferred between pharmacies under common ownership, and flagging gaps in that paperwork during audits. Any pharmacy that moves stock between locations should have its transaction history ready before an auditor asks for it. Read more at Frier Levitt →
A Primer on State Board of Pharmacy Inspections
A two-part explainer walks through what gives a state board of pharmacy the authority to inspect a pharmacy in the first place, along with the different types of inspections a pharmacy might face and how to prepare for each. It isn’t California-specific, but the underlying framework travels well and is a useful read before any pharmacy’s first Board visit. Read more at Frier Levitt →
This update is general information about developments in pharmacy law and regulation. It is not legal advice, it does not create an attorney-client relationship, and it should not be relied on as a substitute for advice about your own situation. Prior results do not guarantee a similar outcome. If you have a specific question about your pharmacy, call or write and we will talk about it properly.
Law Office of Bhavesh Desai | Bhavesh Desai, Pharm.D., Esq.
Yorba Linda, CA 92886 | (909) 618-7299