Recently, the Health Resources and Services Administration (HRSA) directed six drug manufacturers to resume providing 340B discounted pricing to contract pharmacies, following announcements by the manufacturers that they would no longer extend discounted pricing to the entities.
Some of the six manufacturers stopped providing the 340B ceiling price on their drug products sold to covered entities and dispensed through contract pharmacies entirely, while others limited sales by requiring specific data submissions or selling drug products only after a covered entity has demonstrated 340B compliance. The letters sent by Diana Espinosa, HRSA Acting Administrator, note that each of the manufacturers “purports that the rationale for its restrictive action is to prevent diversion and duplicate discounts,” but that the 340B Statute has a way for manufacturers to address those concerns, starting with conducting an audit and then submitting a claim through the Administrative Dispute Resolution process as outlined in Section 340B(d)(3)(A) of the PHS Act.
HRSA conducted a review of those actions and after receiving multiple complaints from covered entities, ultimately finding that the manufacturers would need to resume offering covered outpatient drugs at the 340B ceiling price to covered entities through contract pharmacy arrangements.
HRSA Acting Administrator Diana Espinosa wrote that the drug manufacturers “must comply with [their] 340B statutory obligations and the 340B Program’s CMP final rule and credit or refund all covered entities for overcharges that have resulted from [this] policy… Continued failure to provide the 340B price to covered entities utilizing contract pharmacies, and the resultant charges to covered entities of more than the 340B ceiling price, may result in CMPs as described in the CMP final rule.” Those civil monetary penalties are not to exceed $5,000 per instance of overcharging and would be in addition to repayment for an instance of overcharging as required by section 340B(d)(1)(B)(ii) of the PHS Act.
As one would expect, covered entities and the patients they serve are thrilled with this outcome, as they believe that if 340B access dollars were reduced because of manufacturer actions, many of the services that covered entities offer for their patients would be reduced or eliminated as drug costs would increase for those patients. Elimination or reduction of these programs and services have the potential to impact public health, especially the underserved and uninsured populations who would be disproportionately impacted by these service cuts.
Links to the letters can be found here: AstraZeneca, Eli Lilly and Company, Novartis Pharmaceuticals Corporation, Novo Nordisk, Sanofi, and United Therapeutics.