BREAKING: Novartis the Latest to Seek 340B Contract Pharmacy Claims Data

Your 340B Report for Tuesday August 18, 2020

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Novartis told 340B Report this morning “we are transitioning to a new system that will allow Novartis to identify and mitigate the issue of duplicate discounts and ineligible rebates from 340B contract pharmacies.” | Source: Shutterstock

Novartis the Latest to Seek 340B Contract Pharmacy Claims Data

Drug manufacturer Novartis intends to begin collecting and analyzing 340B covered entities’ contract pharmacy claims data to mitigate duplicate 340B drug discounts and “ineligible rebates,” the company told 340B Report this morning. 340B Report learned of the news yesterday morning but wanted to give Novartis an opportunity to respond. 

Meanwhile, Second Sight Solutions—a prescription drug information technology company that collects and crunches 340B contract pharmacy claims data on manufacturers’ behalf to help them resolve duplicate 340B discounts and Medicaid, Medicare Part D, and commercial rebates—is holding a Zoom meeting for covered entities today starting at 1:00 p.m. Eastern to demonstrate how to register to use its portal, 340B ESP, manage a user account, and upload data. It is scheduled to run until 2:15 p.m. EDT.

Novartis declined to address reports that it is joining join Merck and Sanofi as clients of Second Sight. Up to six additional manufacturers reportedly will soon inform 340B covered entities that they, too, want to start seeing the providers’ contract pharmacy claims data. One lobbyist says “it’s more like double digits.”

“While Novartis continues to support the principles behind the 340B program, we believe—as many other manufacturers do—that the program has grown beyond its original intent,” a Novartis spokesperson said. “As a result, we are transitioning to a new system that will allow Novartis to identify and mitigate the issue of duplicate discounts and ineligible rebates from 340B contract pharmacies. We believe this change is necessary to make the 340B program more sustainable, while ensuring transparency and ensuring minimal impact to program stakeholders. This change will not affect patient access to prescribed medicines.”

Novartis declined to answer whether it will require covered entities to supply their contract pharmacy claims data, as Sanofi is doing, or request the data, as Merck is doing. Novartis also declined to say what it will do if a covered entity declines to hand over its data. Sanofi is requiring providers to start uploading their data to 340B ESP every two weeks beginning Oct. 1. Providers that fail to do so will no longer be able to place bill to / ship to replenishment orders for Sanofi products dispensed by contract pharmacies. Merck set an Aug. 14 deadline for providers to begin uploading their claims data to 340B ESP every two weeks. Merck said it would take “less collaborative, and substantially more burdensome” action against those that decline to supply the requested information.

Yesterday, drug manufacturer AstraZeneca significantly upped the ante, sending 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.”

Drug manufacturer Eli Lilly stopped distributing three formulations of Cialis to 340B contract pharmacies effective July 1. It has left open whether it might stop providing other drugs at 340B prices to contract pharmacies.

Attention 340B covered entities and other stakeholders: If you receive communications from drug manufacturers or their agents adding new conditions on your participation in 340B or denying 340B discounts, we would appreciate hearing from you. Please contact us at info@340breport.com. We will shield your identity if you wish.


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Questions Surround McConnell’ Decision to Let House Democrats’ Drug Pricing Bill Possibly Come Up for Vote

On Aug. 13, just before the Republican-controlled U.S. Senate adjourned for a three-week break, Senate Majority Leader Mitch McConnell (R-Ky.)  asked for, and without objection obtained, the first reading of the Democratic-controlled House’s drug pricing bill, H.R. 3. The House passed the bill back in December 2019 on a party-line vote, and it is considered anathema by most congressional Republicans. It would require the federal government to negotiate prices for certain drugs and require inflation rebates on Medicare Parts B and D drugs.

McConnell said previously H.R. 3 would not be considered in the Senate. Its opponents include  PhRMA, BIO, and the U.S. Chamber of Commerce.

McConnell’s action last Thursday was the first procedural step toward a possible vote on H.R. 3 by the full Senate. In general, a bill must have three readings in the Senate before there can be a vote. The Senate is currently holding pro forma sessions daily until it gets back to normal business on Sept. 8.

McConnell asked for H.R. 3’s first reading together with two other bills generally opposed by the GOP—one to provide for statehood for the District of Columbia, and the other to amend the Affordable Care Act, which Senate Republicans have vowed to repeal.

McConnell thus far has resisted appeals to bring Sen. Finance Chair Chuck Grassley’s (R-Iowa) drug pricing bill, S. 4199, up for a vote.


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U.S. House 340B Bill Draws Two More Co-sponsors

U.S. Reps. Doris Matsui (D-Calif.) and Chris Stewart’s (R-Utah) bipartisan bill to provide temporary 340B program requirement flexibilities to hospitals during the COVID-19 pandemic has two new co-sponsors.

Reps. Max Rose (D-N.Y.) and Sean Maloney (D-N.Y.) signed on as co-sponsors of H.R. 7838 on Aug. 14. The bill would protect hospitals from losing their 340B eligibility due to changes in patient mix during the public emergency, and also temporarily waive the 340B statutory prohibition on hospital purchases of covered outpatient drugs through group purchasing organizations (GPOs).

A similar bill in the Senate, S. 4160, would only protect hospitals from losing 340B eligibility during the pandemic if changes in their patient loads cause their Medicare disproportionate share adjustment percentage to fall below the level necessary for their hospital type to qualify for 340B (greater than 11.75 percent for disproportionate share and free-standing children’s and cancer hospitals, and greater than or equal to 8 percent for rural referral centers and sole community hospitals). It has 12 sponsors, evenly divided between Republicans and Democrats.


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Drug Manufacturer Chiesi Posts 340B Refund Notice

Drug manufacturer Chiesi is providing refunds for 340B ceiling price overcharges totaling $250 or more on five products (11 NDCs in all) for the Q1 2016 through Q3 2019 time period, the company says in a public notice on the U.S. Health Resources and Services Administration (HRSA) website.

The notice includes instructions on how covered entities that believe they overpaid by $250 or less can request refunds. All such requests are due on or before Oct. 30, 2020.