340B Health


in 340B Health News Releases

WASHINGTON, D.C., — Johnson & Johnson has announced it is dramatically reducing the number of community and specialty pharmacies through which hospitals can access discounts on its drugs under the 340B drug pricing program. For hospitals without any of their own retail pharmacies, the new policy restricts their use of pharmacy partners far beyond what drugmakers have restricted in the past. When the policy takes effect March 7, a hospital will be limited to a single outside 340B pharmacy location for the vast majority of J&J’s restricted drugs, and that location must be within 40 miles of the hospital parent site. Hospitals that have in-house retail pharmacies are restricted to using only one outside pharmacy and must hand over claims data to J&J for hospital patients that use any of those in-house pharmacies. The J&J policy change comes soon after the U.S. Court of Appeals for the Third Circuit decided largely in favor of three drug companies that have imposed their own restrictions on access to 340B pricing, but none of those companies operate with the severe restrictions that J&J is planning to implement.

The following is attributed to 340B Health President and CEO Maureen Testoni:

“Johnson & Johnson’s new limits on 340B pricing are more restrictive than those that the Third Circuit court considered, and 340B Health is analyzing the policy change to determine whether it goes beyond what the judges decided in that case. Despite its assertion that it remains committed to 340B, the company is pulling as far back from offering 340B discounts through community and specialty pharmacies as it believes it can. This is a massive escalation of the harm that the company is causing to the health care safety net and the patients in need who rely on it.”

“J&J took in nearly $95 billion in revenues in 2022, making it the second-largest drug company in the world. By targeting its restrictions on some of its costliest specialty drugs and some of its products with the deepest 340B discounts, the company will generate even larger profits while shortchanging hospitals of resources intended for patient care. Hospitals that provide 67% of the uncompensated and unreimbursed care in the U.S. will have far fewer savings to fund crucial services for low-income and rural patients, and they will have far fewer options for providing free or low-cost J&J drugs to patients who otherwise cannot afford them. Because a hospital’s patients often fill prescriptions at multiple pharmacies, the single-location restriction will enable J&J to avoid paying discounts on many costly drug purchases. In addition, specialty pharmacies often are hundreds of miles away from the hospital parent site, so the geographic limits could cut off some 340B hospitals from any pathway to access discounts on certain J&J specialty drugs.”

Contact: David Glendinning at david.glendinning@340bhealth.org or 202-536-2289.