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in 340B Health News Releases

WASHINGTON, D.C.— More than 800 hospitals participating in the 340B drug pricing program today called on the federal government to appeal a recent federal court decision that would essentially allow drug companies to continue imposing limits on discounts for drugs purchased by hospitals and dispensed by community pharmacies.

In a letter to Health and Human Services (HHS) Secretary Xavier Becerra, the hospitals said: “340B is a lifeline to hospitals caring for low-income patients and those living in rural communities. 340B savings allow us to stretch our scarce resources to serve more patients and offer more comprehensive services without using taxpayer dollars. This is especially vital as we continue to confront the tremendous challenges presented by the COVID-19 pandemic.”

Over the past 18 months, a growing number of drugmakers have unilaterally imposed restrictions on 340B pricing to hospitals that partner with local pharmacies to dispense drugs to their patients. HHS has begun enforcement actions against seven of the 10 companies that have imposed or announced these restrictions, and the government is considering imposing hefty fines on those that continue to violate the law. All seven of those companies have gone to federal courts to try to block the enforcement actions.

Two courts have ruled that drug companies have no right under 340B law to impose such unilateral limits. However, on Nov. 5, the U.S. District Court for the District of Columbia issued a decision that upheld price denials by two manufacturers but stopped short of declaring their actions permissible under the 340B law. The government has until Jan. 4, 2022, to appeal that decision. Today’s letter urges the government to appeal and for HHS to continue pressing for “restoration of 340B pricing as rapidly as possible.”

The 340B program requires drug companies participating in Medicaid and Medicare Part B to provide discounts on outpatient drugs to eligible hospitals, health centers, and clinics. The savings created by those discounts support care for patients with low incomes and those living in rural communities. Congress created 340B in 1992 to help these safety-net providers care for patients. More than 600 drug makers participate in 340B. 340B hospitals provide 60% of uncompensated care and 75% of all inpatient care for people with Medicaid.

In May, the Health Resources & Services Administration (HRSA) sent letters to six companies – Eli Lilly, AstraZeneca, Sanofi, Novo Nordisk, Novartis, and United Therapeutics – informing them that their actions to limit 340B discounts are unlawful and ordering them to restore 340B pricing and credit or refund hospitals for overcharges resulting from their policies. All six companies promptly went to court to challenge HRSA’s enforcement letters, as did Boehringer Ingelheim after it received a HRSA enforcement letter in October. Three additional companies – Merck, Amgen, and UCB – have adopted similar limits in recent months.

In their letter, the hospitals thank Becerra and the administration for their actions to date in enforcing the 340B statute. “We also ask HHS to proceed with enforcement actions now against other manufacturers that are denying 340B discounts,” the letter adds.

340B Health President and CEO Maureen Testoni praised the work of the administration on enforcing the law. “The government has been steadfast in its enforcement efforts to date, and the safety-net hospital community is extremely grateful. Together we can put an end to this damaging behavior and restore 340B’s role in supporting our nation’s safety net.”

Nick Gnadt, director of ambulatory pharmacy, system services, with UnityPoint Health, said: “We have seen, first-hand, the impact these drug company actions are having on our hospitals, patients, and communities. At UnityPoint Health, we use our 340B savings to improve our patients’ access not just to prescriptions, but also to comprehensive services that are needed in the communities we serve. The sooner this dispute is resolved and 340B pricing is restored, the better things will be for all safety-net providers and patients in need.”

Ryan Mezinger, executive director of pharmacy services for The MetroHealth System in Cleveland, said: “As a safety-net hospital, MetroHealth serves thousands of patients who struggle to pay for needed medications. Three-fourths of our patients are covered by Medicaid or Medicare or are uninsured. The 340B program allows us to provide vital care in our communities, and it must be protected.”

Contact: Richard Sorian at richard.sorian@340bhealth.org or 202-536-2285.