BREAKING: House Democratic Committee Chairs Say Drug Companies’ Actions Could Put 340B on “Treacherous Path”

Your 340B Report for Thursday Sept. 3, 2020

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House Democratic Committee Chairs Say Drug Companies’ Actions Could Put 340B on “Treacherous Path”

Letting drug manufacturers “pick and choose” which 340B program requirements they will comply with “could set us on a treacherous path where program participants might disregard any or all of their legal obligations,” three U.S. House Energy & Commerce (E&C) Committee leaders warned U.S. Health and Human Services (HHS) Secretary Alex Azar in a letter today. The E&C Committee has direct jurisdiction over the 340B and Medicaid programs.

E&C full committee chair Frank Pallone (D-N.J.), Health subcommittee chair Anna G. Eshoo (D-Calif.), and Oversight and Investigations chair Diana DeGette (D-Colo.) wrote to Azar to express “strong concerns” about several drug manufacturers’ recent moves to stop providing 340B pricing on drugs shipped to contract pharmacies, or to condition continuation of such pricing on provision of claims data. The leaders cited stories in 340B Report and other news outlets that have covered the developments.

“These actions are not oversight or compliance measures authorized by law, and could represent a failure of manufacturers to meet their requirements under the 340B statute,” the committee and subcommittee chairs wrote. They continued:

HHS has an obligation to ensure manufacturers comply with the law. Furthermore, Congress has provided you with tools, including manufacturer auditing rights and civil monetary penalties, to enforce it. Failure to enforce 340B requirements threatens to undermine program integrity. Allowing manufacturers to institute extralegal requirements on covered entities under the threat of refusing to ship drugs as required, or allowing manufacturers to pick and choose where they will comply with program requirements, could set us on a treacherous path where program participants might disregard any or all of their legal obligations.

The E&C chairs’ letter to Azar comes a day after the U.S. Health Resources and Services Administration told 340B Report that it is looking into whether manufacturers’ moves to restrict 340B utilization in contract pharmacies violates the 340B statute and, if so, whether it should levy civil monetary penalties against the companies. HRSA also told 340B Report that it has not agreed to publish Eli Lilly’s Sept. 1 limited distribution notice.

Pallone, Eshoo, and DeGette told Azar in the letter:

We are concerned that in recent weeks, several drug manufacturers have taken or threatened to take varying measures to limit the reach of the 340B Program. This has included placing arbitrary limits on the number of contract pharmacies they will serve, or, in some instances, cutting off delivery of drugs at discounted 340B prices to contract pharmacies altogether. Other drug manufacturers have instituted new reporting requirements on covered entities, suggesting that should covered entities fail to comply, manufacturers may take additional steps that would be “substantially more burdensome.” While we recognize many manufacturers have taken issue with the expanded reach of contract pharmacies and have expressed concern about the potential for duplicate discounts, these actions are not oversight or compliance measures authorized by law, and could represent a failure of manufacturers to meet their requirements under the 340B statute.


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