340B Health

PROTECT PATIENTS. STOP 340B CUTS!

 

The Health Resources & Services Administration (HRSA) has referred eight drug companies - Eli Lilly, AstraZeneca, Sanofi, Novo Nordisk, Novartis, United Therapeutics, Boehringer Ingelheim, and Merck - to the Department of Health and Human Services Office of Inspector General (OIG) for potential fines for their continued violations of federal law requiring 340B drug pricing program discounts on eligible drugs dispensed at community pharmacies. If OIG determines the drug companies knowingly and intentionally overcharged safety-net providers, it can assess civil monetary penalties (CMPs) that can total nearly $6,000 per violation. Two federal district courts have ruled that drug companies cannot unilaterally refuse these discounts or impose conditions on them.

 

What is 340B?

Section 340B of the U.S. Public Health Service Act provides that drug manufacturers that choose to participate in Medicare and Medicaid sell certain outpatient drugs to eligible safety-net providers at a discount. These providers then use the savings to “stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” Learn more about 340B.

Drug Manufacturers Are Restricting Required 340B Discounts

21 drug manufacturers – Eli Lilly, AstraZeneca, Sanofi, Novo Nordisk, Novartis, United Therapeutics, Boehringer Ingelheim, Merck, UCB, Amgen, AbbVie, Bristol Myers Squibb, Pfizer, GlaxoSmithKline, Gilead, Johnson & Johnson, Exelixis, Bausch Health, Biogen, Bayer, and EMD Serono  – have imposed unilateral restrictions on 340B discounts when drugs are dispensed at community pharmacies or have announced their plans to do so. 

These actions are in violation of the 340B statute, which states that manufacturers must provide 340B pricing on any eligible drug to any eligible covered entity regardless of how the hospital intends to dispense the drug.

Facts About the 340B Community Pharmacy Dispute 

  • About 25% of 340B discounts for safety-net hospitals come through these partnerships. This figure is more than 50% for rural hospitals.
  • Based on a May 2022 survey, larger, mostly urban hospitals estimate their median loss from the restrictions at $2.2 million a year, and 10% of them expect their losses to exceed $21 million per year.
  • Based on the same survey, smaller, mostly rural critical access hospitals (CAHs) operating on razor-thin margins project a median loss of $448,000 a year, with 10% expecting more than $1.3 million in annual losses.
  • Hospitals that provide discounted drugs to low-income patients through community and specialty pharmacies report the restrictions are leading to patient care problems, including:
    • Delays in access to needed drugs (75%)
    • Financial hardships from higher bills (69%)
    • Worsened health outcomes (41%)
  • More than 75% of hospitals surveyed reported that they likely will need to make cuts to vital health services and patient support programs.
  • 33% of smaller, mostly rural hospitals report that the restrictions put their facilities at risk of closure.
  • Patients with diabetes and the safety-net providers who care for them are bearing the brunt of the drug companies' actions. Read more in our report.
  • Read how Eli Lilly reaped a 26% increase in revenue in the third quarter of FY 2021, partially by restricting 340B discounts to safety-net hospitals.
 
 
 

News of How Drug Manufacturer Actions Harm Patient Care  

Resources

  • HRSA letters to Eli Lilly, AstraZeneca, Sanofi, Novo Nordisk, Novartis, United Therapeutics, and Boehringer Ingelheim announcing that drug companies restricting 340B discounts to safety-net hospitals and providers on drugs dispensed at community pharmacies violate the law.
  • Read a letter from a bipartisan group of 181 members of the U.S. House of Representatives to HHS. 
  • Read amicus briefs to the U.S. Court of Appeals for the Third Circuit and the U.S. Court of Appeals for the D.C. Circuit from five national hospital organizations urging federal appeals courts to decide for the government in the contract pharmacy dispute. 
  • Read a letter from more than 1,100 safety-net hospitals participating in 340B to HHS. 
  • Read a letter from a bipartisan group of 28 U.S. senators to HHS.
  • Read an amicus brief from a bipartisan group of 25 state attorneys general to U.S. federal appeals courts.  
  • Read a letter from more than 60 advocacy groups for patients and social justice to HHS. 
  • Read a statement by the Association of Black Health-System Pharmacists advocating for protecting the 340B drug pricing program.
  • Read a statement by six national viral hepatitis and HIV advocacy organizations regarding drug company restrictions on 340B pricing.
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