Drug manufacturers can limit healthcare providers' use of outside pharmacies for dispensing drugs under a federal drug discount program, a federal appeals court ruled Monday.
. The companies had sued the U.S. Department of Health and Human Services after it ordered them to stop restricting sales of discounted drugs to so-called contract pharmacies.
The case centers on the federal 340B program, in which drugmakers provide discounts to eligible healthcare providers that serve low-income populations. Drugmakers are required to participate in the 340B program in order to receive funds from government health insurance programs like Medicare and Medicaid.
In 2020, drugmakers began limiting 340B drug sales to contract pharmacies. They said such pharmacies had become overused, leading to illegal diversion of drugs and, in some cases, to the drugmakers providing double discounts on the same drug.
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