Twenty-Eight States Demand Laws Be Enforced on 340B Drug Pricing

On December 14, 2020, the attorneys general for twenty-eight states sent a letter to United States Health and Human Service Secretary Alex Azar, demanding that he take immediate steps to enforce the laws in the 340B Drug Pricing Program to “address drug companies’ unlawful refusal to provide critical drug discounts to covered entities such as community health centers under the 340B Drug Pricing Program.”

The letter alleges that while the 340B statute requires manufacturers who participate in Medicare Part B and Medicaid to “offer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price,” there are currently a handful of drug manufacturers (Eli Lilly & Co., AstraZeneca PLC, Sanofi SA, Novartis Pharmaceuticals, Merck & CO., & United Therapeutics Corp.) that have “threatened the loss of or have already refused to provide drug discounts for drugs shipped to contract pharmacies that administer 340B drugs on behalf of some of our nation’s most impactful safety-net providers.”

In the letter, the attorneys general wrote that “Each day that drug manufacturers violate their statutory obligations, vulnerable patients and their healthcare centers are deprived of the essential healthcare resources that Congress intended to provide,” continuing to say, “Drug manufacturers are, without justification, flouting discounted pricing requirements for low-income patients and/or unreasonably conditioning 340B pricing on data demands, depriving such patients of affordable medications to the detriment of the health centers and hospitals that serve these vulnerable communities. During a national public health crisis, these actions are especially egregious and cannot be ignored.”

The AGs contend that while HHS has recently published regulations that establish an administrative dispute resolution (ADR) process for covered entities to file claims and seek relief, it is not sufficient to “address immediate harm caused by drug companies.”

The bipartisan letter was spearheaded by Connecticut Attorney General William Tong and California Attorney General Xavier Becerra. The Republican attorneys general who helped to spearhead the effort were Kansas Attorney general Derek Schmidt and Nebraska Attorney General Doug Peterson. Other states who signed off on the letter included: Colorado, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Vermont, Virginia, Washington, Wisconsin, as well as the District of Columbia.

Xavier Becerra, President-elect Joe Biden’s choice to be the next Health and Human Services (HHS) Secretary, released a statement on the 340B program, saying,

While Americans grapple with COVID-19, it is critical that we protect access to affordable care. Discounts afforded under the 340B Drug Pricing Program are more critical now than ever. They ensure that low-income and uninsured patients have access to affordable medication as they deal with the substantial impact of the pandemic. We call on HHS to hold these non-compliant drug manufacturers accountable and provide immediate relief for healthcare centers and the Americans they serve.

Connecticut AG William Tong also released a statement on the letter, “Drug manufacturers are unlawfully attempting to disrupt arrangements that have long made it easier for low-income Americans to access prescription drugs. HHS must immediately step in to protect vulnerable patients from the unlawful and unacceptable actions of these drug manufacturers. The 340b Drug Pricing Program has strong bipartisan support from lawmakers and leaders nationwide, and HHS should not allow drug makers to unilaterally ignore their obligations.”

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