The Health Resources and Services Administration tells Inside Health Policy that drug makers that curb 340B discounts at contract pharmacies might prevent vulnerable people from getting affordable drugs and the agency is encouraging drug makers to continue the discounts — but it cautions the agency can only take enforcement action if there is a violation of the statute.
America’s Essential Hospitals is the latest group to call on HRSA and HHS to step in and stop recent moves by drug makers to require providers share claims data in order in order to access 340B discounts through contract pharmacies. Following related moves by a handful of other key drug makers, AstraZeneca recently told providers it plans to end 340B pricing for contract pharmacies, with few exceptions.
HRSA tells IHP it is looking into the manufacturer’s announcement, and that contract pharmacies are vital to 340B providers. The agency “strongly encourages all manufacturers to sell 340B priced drugs to covered entities through contract pharmacy arrangements,” HRSA says.
“Manufacturers that refuse to honor contract pharmacy orders may be significantly limiting access to 340B discounted drugs for many underserved and vulnerable populations. Many of these populations may reside in geographically isolated areas and rely on contract pharmacies as a critical point of access for obtaining their prescriptions,” HRSA says.
However, the agency notes that it has limited authority to enforce 340B guidance — unless there is a violation of statute.
“Without comprehensive regulatory authority, HRSA is unable to develop enforceable policy to ensure clarity in program requirements across all the interdependent aspects of the 340B Program, although HRSA is still considering this matter as raised by the actions of these manufacturers,” HRSA says.
Prior to AstraZeneca’s announcement, Sanofi told 340B providers they need to share claims data for 340B drugs dispensed through contract pharmacies or the drug manufacturer will stop shipping the discounted drugs to those pharmacies. Merck Sharpe & Dohme Corp. also told 340B providers it wants them to share contract pharmacy claims data for Merck products, or the drug maker may take other program integrity steps that are less collaborative with the providers and more burdensome to them. Also, as of July 1, Lilly limited the distribution of three formulations of the erectile disfunction drug Cialis at 340B prices to providers in the 340B program and their child sites — and will not extend the ceiling price to contract pharmacies.
HRSA previously told IHP it was working to understand Merck’s and Sanofi’s plans.
While HRSA did not explicitly tell IHP whether the drug makers’ actions violate the statute, Maureen Testoni, president and CEO of 340B Health, alleged they do. Testoni said 340B Health believes there is a strong, statutory basis for enforcement action from HRSA, but if agency doesn’t act then 340B Health would consider using the courts to compel HRSA to step in.
The statute says manufacturers have to offer 340B prices to covered entities; it doesn’t say manufacturers can avoid offering the discounts if they don’t like the way covered entities are obtaining them, such as though contract pharmacies, Testoni told IHP. The group, along with others in a 340B coalition, laid out reasoning behind why they want HRSA to step in to stop Lilly and Merck in a July 16 letter to HHS Secretary Alex Azar.
America’s Essential Hospitals on Tuesday (Aug. 18) increased the pressure on HHS.
“Recent actions by pharmaceutical manufacturers hinder access to affordable medications for millions of people who face financial hardships and defy clear statutory requirements that they provide drugs to 340B Drug Pricing Program covered entities,” said Bruce Siegel, president and CEO of America’s Essential Hospitals, in a statement.
Siegel alleged the data requests from manufacturers have no clear link to program integrity and “seem to be little more than a fishing expedition.” The federal government already has safeguard in place to avoid duplicate discounts, Siegel said.
CMS earlier this year said there was a need to avoid duplicate discounts between 340B and Medicaid. The agency suggested that states could use state plan amendments to keep some — or all — providers and contract pharmacies from using 340B drugs for Medicaid beneficiaries. However, there are no statutory prohibitions on Medicare or commercial duplicate discounts, and Siegel said data requests in those areas are particularly concerning.
“We call on the Department of Health and Human Services to intervene and put an end to these unwarranted manufacturer requests,” Siegel said. — Michelle M. Stein (email@example.com)