Eli Lilly Dramatically Escalates Efforts to Restrict Access to 340B Pricing

Your 340B Report for Tuesday September 1, 2020

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Note from the Publisher and CEO Ted Slafsky:  Bronwyn Mixter is filling in for Tom Mirga this week.  If you have story ideas or tips, feel free to reach her at bronwyn.mixter@340breport.com or 703-403-5926. We’re pleased to include in today’s issue sponsored content from 340B Report sponsor Trellis Rx who will be hosting a webinar September 9th on enhancing patient care in the infectious disease setting with 340B health system specialty pharmacy services. See details below.

Eli Lilly and Co. informed covered entities today it is limiting distribution on all of its products with the exception of insulin to 340B contract pharmacies.

BREAKING: Eli Lilly Dramatically Escalates Efforts to Restrict Access to 340B Pricing

In a dramatic escalation of its battle against the 340B contract pharmacy program, drug manufacturer Eli Lilly and Co. informed covered entities today it is significantly escalating its efforts to restrict access to 340B pricing. 

340B Report has obtained a copy of a Lilly notice saying the company is limiting distribution on all of its products to 340B contract pharmacies today, September 1, with the exception of insulin. The notice has not been posted yet on the U.S. Health Resources and Services Administration’s (HRSA) Office of Pharmacy Affairs website. 

As 340B Report broke the news in July, the company announced it would cease distribution of its erectile dysfunction drug Cialis to 340B contract pharmacies and limit distribution “directly to covered entities and their child sites only starting July 1” 

In the new notice, Lilly says it will provide 340B pricing on its insulin products only if the contract pharmacy does not mark up the drug or otherwise charge a dispensing fee. Lilly cites President Trump’s Executive Order for its justification for conditioning its sale based on what the contract pharmacy charges for the drug. Community health centers, the target of the executive order, were outraged by the President’s action.  Health and Human Services Secretary Alex Azar, who announced the executive order with the President, led U.S. operations for Lilly prior to joining the Administration.

In a comment provided to 340B Report, Eli Lilly said:

Report after report shows 340B is not working for patients and needs reform. We support recent executive action on 340B that sought to make insulin available to low-income patients at the same price at which it was purchased. A 340B patient filling their prescription for a penny-priced Lilly insulin at any participating contract pharmacy will be able to do so at the same price we sell it for under the program – approximately 10 cents. We will continue to sell all our medicines to eligible 340B covered entities and their patients.

Lilly is committed to the 340B program and the patients it was created to serve, but the program needs reform to better define who is entitled to discounts, determine hospital eligibility, and clarify what role contract pharmacies should appropriately play. Although we are taking individual steps as a company to make this happen, all stakeholders in the system should come together to make sustainable reform possible.

The 340B Report will provide more details in the next issue.

Sanofi Responds to AHA’s Complaints About 340B Claims Demand

In an Aug. 28 letter responding to the American Hospital Association (AHA)’s complaints about the company’s new 340B contract pharmacy claims collection initiative, Sanofi said its changes will comply with applicable law and will not burden 340B covered entities or patients. Sanofi, which was the second company to partner with 340B ESP, has told covered entities they must submit contract pharmacy claims data every two weeks starting on October 1.  If 340B providers refuse to do so, the manufacturer will not offer 340B discounts to their contract pharmacies.

Sanofi says they need the data to “to identify and resolve duplicate Medicaid and commercial rebates.” 340B covered entity groups have pushed back saying the request is too broad in scope, highly burdensome and that threats to take away 340B discounts are in direct conflict with the 340B statute.

Sanofi’s letter was in response to an Aug. 21 letter from the AHA asking the company to stop these actions. The AHA also sent letters to four other drug manufacturers asking them to immediately cease actions to limit the distribution of certain 340B drugs to hospitals and health systems.

“It is an outrage that these actions are being taken at a time when hospitals are in the midst of their response to the COVID-19 public health emergency” and “instead of supporting the hospitals caring for communities ravaged by the public health crisis, these companies are attempting to compel hospitals to divert critical resources away from the pandemic,” the AHA said.

Sanofi’s Senior Vice President Adam Gluck said in his response that he is “surprised and disappointed” by the group’s “unfounded claims and incendiary tone.”

“Sanofi supports the 340B Program’s core objective of increasing access to outpatient drugs among uninsured and vulnerable patients and is committed to strengthening the Program’s mission, a goal that is only supported and advanced through our initiative to prevent illegal and/or inappropriate duplicate discounts,” Gluck said.

Gluck said Sanofi will continue to offer all of its drugs to all 340B covered entities. “At most, if a covered entity refuses to provide the requested data, we will restrict the entity’s use of contract pharmacy arrangements, but these entities will remain eligible to purchase at 340B prices for shipment to their own facilities,” Gluck said. 

Additionally, Gluck said Sanofi “understands well the challenges posed by the COVID-19 pandemic” as the company is conducting multiple research and development initiatives to fight the virus. “Because our [340B] initiative will create only a minor data sharing obligation for 340B covered entities and will strengthen the 340B Program, this initiative will not impair our common fight,” Gluck said. 

An AHA spokesman told the 340B Report that the AHA stands by its initial letter.

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SPONSORED CONTENT

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Patients living with HIV, Hepatitis C, and other infectious diseases sometimes require specialty medications to manage or treat their conditions. These medications are often difficult for patients to afford and often cause challenging side effects. Without appropriate support from their pharmacy, patients may struggle to afford and adhere to their therapy regimens, resulting in subpar clinical outcomes.

The clinically-integrated 340B health system specialty pharmacy care model has proven effective at ensuring patients receive the coordinated, high-touch care needed to improve adherence and enhance outcomes. During this continuing education webinar on Sept. 9th from 1:00-2:00 PM ET hosted by Trellis Rx, a pharmacist, pharmacy liaison, and provider from Trellis Rx’s partner Summa Health’s Care Center will share:

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Hospital, Pharmacist Groups Ask HHS to Stop Drug Companies from Undermining the 340B Program

Seven hospital and pharmacist associations Aug. 26 sent a letter to Health and Human Services Secretary Alex Azar asking him to prevent pharmaceutical companies from undermining the 340B program.

Five drug manufacturers recently have taken actions to limit access to 340B drug discounts. AstraZeneca and Eli Lilly have told 340B covered entities that they will no longer charge the 340B discounted price for some or all of their drugs when they are dispensed by community-based pharmacies. Additionally, Merck, Novartis, and Sanofi are demanding claims data for all commercially insured, Medicaid and Medicare Part D patients filling prescriptions in a 340B contract pharmacy.

“If left unaddressed, these actions will open the way for other drug manufacturers to deny discounts for other products,” the hospital and pharmacist groups said. These actions “are clearly contrary to the intent of the 340B program and will result in significant harm to the millions of patients and communities who rely on providers that participate in the program for their care.”

The associations asked Azar to use his authority to enforce the 340B statute and order the drug manufacturers to comply with the law. “This is particularly critical now as these hospitals need every resource available to care of their patients in vulnerable communities during the COVID-19 public health crisis,” the letter said.

The letter was signed by 340B Health, America’s Essential Hospitals, the American Hospital Association, the American Society of Health-System Pharmacists, the Association of American Medical Colleges, the Catholic Health Association, and the Children’s Hospital Association.

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Ryan White Clinics Join Fight Against Drug Manufacturers’ Actions to Limit 340B Drug Discounts

Ryan White Clinics for 340B Access (RWC-340B) is the latest group to join the fight against recent actions by drug manufacturers to limit 340B discounts. Specifically, RWC-340B is calling on Congress, the Department of Health and Human Services (HHS), and the Health Resources and Services Administration (HRSA) to stop these actions, Shannon Stephenson, president of RWC-340B, said in an Aug. 27 statement. RWC-340B is a national organization of HIV/AIDS medical providers receiving support under the Ryan White CARE Act and participating in the 340B program.

Recently several drug manufacturers have sent letters either announcing new policies of only selling 340B drugs to in-house pharmacies or demanding submission to new on-line portals of sensitive claims data to which they are not entitled, Stephenson said. The drug makers’ actions “thwart Congress’ and the agencies’ oversight responsibility, undermine the integrity of the 340B program, and directly threaten access to the care we provide our vulnerable patient population,” Stephenson said.

Stephenson said it is particularly concerning that drug manufacturers have taken these actions during the COVID-19 pandemic. 

“Ryan White clinics are not only answering the call to protect their communities from COVID-19, they are simultaneously continuing to fight the HIV/AIDS epidemic,” Stephenson said. “Our member organizations are skilled at caring for patients with infectious diseases and, for this reason, are on the front lines of fighting against both epidemics.” 

Stephenson said without access to 340B drug discounts, RWC-340B’s members would be forced to provide fewer services and/or serve fewer patients. Some clinics also may be forced to close, she said. 

“There is no question in our minds that these manufacturer actions would seriously undercut our ability to fight COVID-19 and HIV/AIDS,” Stephenson said.

The drug manufacturers involved, Merck, Novartis, Sanofi, AstraZeneca, and Eli Lilly, have said previously that while they support the 340B program, they are taking these actions to prevent duplicate discounts. 

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CMS’ Interpretation of Recent Law Could Limit 340B Discounts on Substance Use Disorder Treatment Drugs

The Centers for Medicare and Medicaid Services (CMS) might soon interpret a 2018 law to exclude Medicaid rebates on drugs used to help overcome addiction to opioids, which in turn could wall the drugs off from 340B drug discounts, according to a recent report from the Pink Sheet. 

The Support Act of 2018 requires all state Medicaid programs to cover all Food and Drug Administration-approved drugs for medication-assisted treatment (MAT) from Oct. 1 through September 2025. As first reported by Sarah Karlin-Smith of the Pink Sheet Aug. 24, CMS is soon expected to interpret that law as meaning that it cannot collect rebates for MAT drugs because the statute did not address the Medicaid Drug Rebate Program. MAT drugs include buprenorphine, naltrexone, and methadone. 

This interpretation could cause issues for 340B providers since 340B drug discounts are tied to whether a drug is part of the Medicaid rebate program, Ted Slafsky, Publisher & CEO of 340B Report told Pink Sheet.  “If they interpret it this way, it’s going to be highly problematic for 340B providers because they depend on these discounts and they serve a high number of patients with substance use disorder challenges.”

Matt Salo, executive director of the National Association of Medicaid Directors (NAMD), told 340B Report Aug. 27 that Congress plans to fix the Support Act but it’s unlikely they will have time to pass any kind of legislation before it takes effect on Oct. 1. 

“If this goes through and starting Oct. 1, we stop getting the rebates that is going to be a huge hit to the [Medicaid] program and it couldn’t come at a worse time,” Salo said. “Whether it’s the pandemic or whether it’s the economic downturn, states are in the process of making serious, severe cutbacks and restrictions and changes. And this is just getting lumped on top and it’s going to make an ugly situation a lot worse.”

To fix this issue, Salo said CMS could make an emergency statement saying it is putting a temporary stay on enforcing the statute to give Congress time to fix it. However, he said the best possible fix is for Congress to act.