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340B ESP’s Terms Of Use Set The Tone For The Spurious Demands It Places On Covered Entities.


As we noted in a previous post, 340B ESP is nothing less than a brazen and (in our opinion) unlawful ploy by the drug manufacturers to evade the discounts they are legally obligated to offer eligible entities. 

This article details the unreasonable demands 340B ESP places on covered entities, through a review of its Terms Of Use. In unedited form, that legal document runs 5798 words in length, more than 16 pages in 11-point Times New Roman with 1.5 line-spacing. Based on the average adult’s speed in reading technical documents (62.5 words per minute), that means 340B ESP’s terms of use alone will take the average reader nearly 93 minutes to complete. 

Moreover, that estimate constitutes a fraction of the time it would take most health systems' 340B-reporting employees to read and fully comprehend the terms (assuming full comprehension is even possible for anyone without a law degree, and significant experience in drafting and interpreting legal documents).

For the sake of argument, let’s assume it would take the average 340B-reporting employee an entire day to read and comprehend 340B ESP’s Terms Of Use — and that’s discounting any time (and expense) involved in consulting with the health system’s legal counsel for explanations and interpretations.


340B ESP’s unsurpassed cheek. And unsurpassed irony.

In its Limitations Of Liability section, 340B ESP asserts, in all caps:

THE LIMITATIONS OF LIABILITY SHALL NOT APPLY TO SECOND SIGHT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. SECOND SIGHT'S AGGREGATE LIABILITY FOR DIRECT DAMAGES UNDER THIS AGREEMENT WILL NOT EXCEED ONE HUNDRED DOLLARS ($100).

Moreover, under a sub-section entitled “Monitoring,” the Terms of Use asserts, “You acknowledge and grant us the right to…report any activity that we suspect may violate any law or regulation to regulators, law enforcement officials or other persons or entities that we deem appropriate.” Again, this is coming from an organization operating wholly outside the regulations set-forth by Congress and established by HRSA.

As the non-profit 340B advocacy group 340B Health notes in a lengthy analysis of 340B ESP Terms Of Use.

Under any analysis, Merck’s request for contract pharmacy data on commercial claims is outside the scope of the 340B statute, suggesting that Merck’s plan is not based solely on ensuring covered entity compliance with 340B rules. 

Accordingly, Merck’s request that covered entities share contract pharmacy claims data to ensure it is not paying "duplicate discounts” on Medicare Part D and commercial claims is unrelated to compliance obligations 340B covered entities have under the 340B program.


Parting Shots in 340B ESP’s Terms Of Use

The following passages come from the Terms Of Use’s final few sections.

The Covered Entity Platform is subject to modification (including addition, alteration, or deletion) by Second Sight in its sole discretion.

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You understand that Second Sight may at any time and from time to time modify or discontinue access to the Covered Entity Platform (or any part), with or without notice, temporarily or permanently...

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You expressly acknowledge and agree that the Participating Pharmaceutical Manufacturers are third party beneficiaries of these Terms and have the full rights to enforce these Terms as if any one of them was a signatory hereto.

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Second Sight may revise these Terms from time to time by posting such revised Terms on this website, or otherwise notifying you in advance of making effective such revisions to the Terms. Such revised Terms shall be effective to you upon the effective date provided in the posting or other notice, unless otherwise explicitly stated by Second Sight. It is your responsibility to be aware of any such revised terms by checking and reading these Terms from time to time and your notices. 


The good news about 340B ESP, for covered entities

Despite the well-founded outrage over 340B ESP and manufacturer restrictions, ProxsysRx continues to generate significant savings and revenues for the health systems we serve. Altogether, our efforts have generated tens of millions in 340B savings and revenue for the hospitals we serve.


ProxsysRx is here to help, if you have questions. 

There are so many ways to optimize your 340B drug program savings and benefits, while minimizing the likelihood of noncompliance.

For more information, contact Howard Hall.

C: 205.588.0946 | howard.hall@proxsysrx.com



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