340B Patient Definition and Implications for Duplicate Replenishment

In November 2023, the US District Court for the District of South Carolina issued a decision in a lawsuit involving the federally qualified health clinic (FQHC) Genesis HealthCare, a “covered entity” eligible to purchase significantly discounted drugs under the 340B Drug Pricing Program. The court agreed with Genesis that the 340B statute does not require 340B prescriptions to originate in 340B-eligible locations if the prescriptions are for a covered entity’s “patients.” In commenting on potential definitions for the term “patient” in this context, the court cited as one possible framework an American Medical Association definition that defines an established patient as one who has received care within the past three years.

This decision may have encouraged covered entities to take a broader view of which patients and prescriptions are 340B eligible, as noted in a prior issue brief. As a result, two or more covered entities may consider the same individual to be
their “patient” at a given time. If an individual fills a prescription at a pharmacy that is eligible to receive shipments of 340B-priced drugs on behalf of two or more of those covered entities, more than one covered entity potentially could seek 340B pricing for the prescription by placing a “replenishment” order with their wholesaler.