340B HEALTH URGES SWIFT FEDERAL ACTION AFTER ELI LILLY CUTS OFF 340B PRICING TO HOSPITALS
WASHINGTON, D.C.— Today, Eli Lilly has terminated 340B pricing for select hospitals that have not acceded to the company’s demands for extensive in-house pharmacy claims data. 340B Health urges the Health Resources & Services Administration (HRSA) to take immediate enforcement actions against Lilly.
As a result of Lilly’s decision to deny hospitals access to 340B pricing for the company’s products unless they submit millions of lines of patient claims-level data from their in-house retail and mixed-use pharmacies, affected hospitals now must purchase those drugs at the significantly higher wholesale acquisition cost (WAC), eliminating the statutory 340B savings they should be receiving.
Congress established 340B to help safety-net providers stretch scarce resources, expand access to care, and provide life-saving services to at-risk patients. The 340B statute requires participating drug companies to provide discounted pricing to eligible hospitals and other covered entities. It does not authorize manufacturers to threaten those discounts based on non-submission of data that Congress never required covered entities to provide.
The following statement can be attributed to Maureen Testoni, president and CEO of 340B Health:
“Eli Lilly has cut off 340B pricing for drugs hospitals order and dispense directly to their patients. These dispenses are at the very core of the 340B program, and Eli Lilly’s refusal to provide 340B pricing to hospitals that do not surrender to its sweeping claims data demands does not, in our view, represent a legitimate offer by Lilly to sell drugs to covered entities at the 340B price. Lilly’s policy is a direct attack on the nation’s health care safety net and a dangerous escalation that will significantly increase costs for 340B providers as well as undermine access to care and the very purpose of 340B.
“We believe Lilly’s actions violate the law and are an unprecedented attempt to rewrite the 340B rules without congressional approval. Congress did not give drug companies the authority to create their own reporting requirements and then deny discounts to hospitals that refuse to comply. Lilly’s policy shares many aspects of unilateral drug company rebate models that HRSA has opposed, a position two federal courts subsequently upheld. If HRSA allows this unlawful conduct to stand, many other drugmakers are poised follow suit, dramatically increasing costs for safety-net providers and threatening health care access for millions of patients.
“The consequences will be severe. 340B hospitals provide a disproportionate share of care to low-income and vulnerable patients — delivering approximately 77% of the nation’s Medicaid care and 67% of uncompensated care. Hospitals rely on 340B savings to offset underpayments by Medicaid and Medicare as well as to subsidize rural health services, oncology programs, behavioral health, and many other essential programs that otherwise would be unavailable. We urge HRSA to take enforcement action immediately to restore access to 340B pricing and ensure drugmakers follow their obligations under federal law.”
Contact: Jon Tilton at jon.tilton@340bhealth.org or 202-536-2285