BREAKING: Novartis Says It’s Weighing Whether to Start Cutting Off 340B Contract Pharmacy Discounts on Oct. 1. Sanofi Says it Will. (Update 1)

Your 340B Report for Friday Sept. 25, 2020

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Novartis Says It’s Weighing Whether to Start Cutting Off 340B Contract Pharmacy Discounts on Oct. 1. Sanofi Says it Will.

(Update 1, Friday Sept. 25, 1:00 p.m. EDT—Merck is “considering any next steps in our effort to ensure compliance with the 340B program requirements, a company spokesperson said. “In June we contacted nearly 7,500 entities to request their voluntary participation in our program. To date, 500 covered entities have registered for the program and of those only 30 have begun sharing data.” Merck said in letters to 340B covered entities this summer that those that failed to begin uploading their contract pharmacy claims data to vendor 340B ESP potentially could face “less collaborative, and substantially more burdensome” treatment from the company.)

Drug manufacturer Novartis “still expects” 340B covered entities, beginning Oct. 1, to provide their contract pharmacy claims data to vendor 340B ESP every two weeks, the company told 340B Report last night. However, it said it “will evaluate next steps as needed” about whether on Oct. 1 it also will stop providing 340B discounts to entities that do not comply.

Drug manufacturer Sanofi, meanwhile, told 340B Report this morning that it still plans, effective Oct. 1, both to require entities to upload their contract pharmacy claims data to 340B ESP biweekly, and to stop letting entities that fail to provide the data to place bill to / ship to replenishment orders for Sanofi products dispensed through a contract pharmacy.

“If a covered entity provides these data necessary to identify and prevent waste and abuse then nothing will change,” a Sanofi spokesperson said. “If a covered entity chooses not to provide the limited data, it will remain able to purchase 340B-priced drugs for shipment to its own facilities.” 340B providers have pointed out that the scope of the data request is not limited and it has brought up legal concerns as well.

This morning, we asked drug manufacturer AstraZeneca if it still plans, effective Oct. 1, to limit 340B pricing to a single contract pharmacy site for those covered entities that do not maintain on on-site dispensing pharmacy, and to stop processing 340B chargebacks for all 340B contract pharmacy arrangements on Oct. 1.

We also asked drug manufacturer Merck this morning if it continues to require covered entities, as it had since Aug. 14, to upload contract pharmacy claims data to 340B ESP every two weeks or possibly face more burdensome action. We also asked Merck if it has imposed sanctions on any entities that have declined to share their data.

Yesterday, 340B Report learned that at least two community health centers were told by Cardinal Health representatives that Novartis was backing off its plan to stop providing 340B-priced products to the contract pharmacies of covered entities that do not register with 340B ESP and upload their contract pharmacy claims data.

Late yesterday afternoon,  a source told 340B Report that a congressional staffer had confirmed that Novartis was backing off.

The reports about Novartis surfaced a day after the U.S. Health and Human Services Department (HHS) disclosed that it told drug manufacturer Eli Lilly and Co. on Monday that Lilly should not have assumed HHS endorsed its decision to dramatically scale back 340B pricing on Lilly products. The news about Novartis also came soon after U.S. House and Senate members sent bipartisan letters to HHS Secretary Azar asking him to halt drug manufacturers’ recent moves against 340B contract pharmacy.

Thomas Kendris, U.S. Country President of Novartis, is scheduled to testify Oct. 1 before the U.S. House Oversight and Reform Committee about his company’s drug pricing practices. Questions are expected to focus mainly on what Novartis charges for its cancer drug Gleevec. The fact that Kendris is testifying on the same day that Novartis’ new 340B policies are due to take effect raises the odds he will be grilled about those polices.


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