Dive Brief:
- The American Hospital Association on Tuesday sent another letter to the Department of Health and Human Services about the 340B drug discount program, asking the agency to stop drug manufacturers from limiting distribution of medicines covered by the program.
- The request follows a similar July letter protesting action from Eli Lilly and Merck & Co. AHA said Sanofi, Novartis and AstraZeneca have followed suit with what the group calls "abusive tactics."
- The Health Resources and Services Administration, which administers the program, said it is considering whether manufacturer policies violate the 340B statute and whether sanctions such as civil monetary policies may apply.
Dive Insight:
The 340B program has a storied history of conflicts between drugmakers, regulators and the hospitals that are enrolled, which are mostly disproportionate share and critical access facilities.
The most recent issue stems from drugmaker decisions to stop giving 340B discounts to contract pharmacies, which many hospitals use instead of dispensing drugs in-house. Manufacturers have said they are concerned about duplicate discounts through the program and Medicaid, which AHA characterizes as "unsubstantiated."
"The drug companies are attempting to exploit for their financial benefit the current COVID-19 health care crisis," AHA said in its letter. "[W]e urge you to act immediately against any drug manufacturer employing these pernicious tactics to ensure that 340B drugs are available and accessible to vulnerable communities."
HRSA said it believes contract pharmacies are a vital function for 340B providers but noted it has a "limited ability to issue enforceable regulations to ensure clarity in program requirements."
"We believe that manufacturers that refuse to honor contract pharmacy orders could significantly limit access to 340B-discounted drugs for many underserved and vulnerable populations who may be located in geographically isolated areas and rely on contract pharmacies as a critical point of access for obtaining their prescriptions," the agency said.
HRSA encouraged drugmakers to sell 340B-priced drugs to eligible hospitals directly as well as through contract pharmacy arrangements.
A U.S. Government Accountability Office report from 2018 did find that HRSA had a weakness in its oversight that hindered its ability to ensure compliance at contract pharmacies, including potential duplicate discounts. Another report from earlier this year found that limitations in HHS oversight of the 340B program and Medicaid Drug Rebate Programs could increase the risk of duplicate discounts.
The pharmaceutical lobby PhRMA said that,while it cannot speak to individual company actions, the growth in contract pharmacies participating in 340B "has raised concerns about the integrity of the program."
Hospitals have been losing another fight over 340B, this one over a Centers for Medicare and Medicaid Services plan to reduce the drug payments by 28.5%. In July, a district court ruled the cut was based on a "reasonable interpretation of the Medicare statute" and could stand.