BREAKING: AstraZeneca Raises the Ante in Drug Industry Push Against 340B Contract Pharmacy

Your 340B Report for Monday August 17, 2020

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Beginning Oct. 1, AstraZeneca will provide 340B pricing to only one contract pharmacy per covered entity, and only if the entity lacks an in-house pharmacy. | Source: Shutterstock

AstraZeneca Raises the Ante in Drug Industry Push Against 340B Contract Pharmacy

Drug manufacturer AstraZeneca today sent letters to 340B covered entities and its wholesale pharmacy contacts telling them that, effective Oct. 1, it “only will process 340B pricing through a single contract pharmacy site for those covered entities that do not maintain their own on-site dispensing pharmacy.” We have reached out to AstraZeneca for comment. The U.S. Health Resources and Services Administration (HRSA) said, “We are in the process of reviewing the information.”

In a related development, 340B Report has learned that five to six manufacturers reportedly soon will join Merck and Sanofi as clients of Second Sight, a new company that acquires 340B covered entities’ contract pharmacy claims data on manufacturers’ behalf for the purpose of identifying and resolving duplicate Medicaid, Medicare Part D, and commercial rebates.

In its letters today to covered entities and wholesalers, AstraZeneca said, to date, it has processed chargebacks associated with 340B contract pharmacy arrangements “consistent with the approach proposed” in HRSA’s April 2010 340B contract pharmacy guidance. Starting Oct. 1, the company said it “plans to adjust this approach such that” it will provide 340B-priced products only to one contract pharmacy per covered entity for those lacking an outpatient dispensing pharmacy.

In its letter to wholesalers, Astra Zeneca said it will honor 340B pricing on all chargeback invoices prior to Oct. 1, “but AstraZeneca asks for the removal of contract pharmacy eligibility prior to or by the end of business September 30, 2020.”

Effective July 1, drug manufacturer Eli Lilly stopped providing 340B pricing on three formulations of its drug Cialis when the product was shipped to contract pharmacies. Like AstraZeneca, Lilly is letting entities without an in-house pharmacy designate a single contract pharmacy. Asked about Lilly’s move, HRSA said its 2010 contract pharmacy guidance remains in effect but is not enforceable unless there is a clear violation of the 340B statute. The 2010 guidance clarified that that covered entities could contract with multiple pharmacies to dispense 340B purchased drugs to eligible patients. Before the guidance, 340B multiple contract pharmacy was limited to a small number of entities enrolled in a demonstration project. 

Covered entities predicted that other drug manufacturers would follow Lilly’s lead, or go even further, if HRSA failed to defend its 340B contract pharmacy guidelines. Lilly stopped providing 340B pricing on only three NDCs shipped to multiple contract pharmacies. AstraZeneca’s move would result in the cessation of 340B pricing on all its products shipped to multiple contract pharmacies. 

In July, when HRSA was asked if it would take action against Lilly for not providing 340B-priced drugs to contract pharmacies, it said only that it “strongly encourages all manufacturers to sell 340B priced drugs to covered entities through contract pharmacy arrangements.” It is unclear if HRSA has taken stronger action since then.

340B provider groups say they believe that the drug companies have violated the 340B statute. Some have said so in letters to the government and the manufacturers. The groups are expected to respond more strongly in the coming days and weeks.


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