5 drugmakers tell hospitals they plan to withhold 340B discounts

At least five drugmakers have told hospitals in recent weeks that they won't provide discounts on drugs under the 340B drug-pricing program, STAT reported. 

The 340B program was created in 1992 and requires drugmakers to offer discounts on all outpatient drugs to hospitals and clinics that serve indigent populations. About 2,500 hospitals around the country participate in the program. 

Since late June, Merck, Sanofi, Eli Lilly, Novartis and AstraZeneca have all told 340B hospitals that they may withhold discounts for various reasons. 

AstraZeneca sent letters to hospitals saying discounts will end Oct. 1 to any hospitals that ship drugs to retail pharmacies instead of dispensing them in their own pharmacies. 

Novartis asked member hospitals to send Medicare Part D and commercial health claims for patients before they will provide the discounts. 

The drugmakers said they are trying to avoid paying duplicate discounts. A Novartis spokesperson told STAT: "We believe, as many other manufacturers do, that the program has grown beyond its original intent. 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."

A Sanofi spokesperson told STAT that it has conducted prior audits of 340B claims and recouped millions of dollars from duplicate billings. 

Sanofi sent a letter to HHS Aug. 13, saying "Sanofi supports the 340B Program’s core objective of increasing access to outpatient drugs among uninsured and vulnerable patients and is committed to strengthening its mission. Under our initiative, 340B covered entities will upload de-identified claims data to a secure system so that Sanofi can identify and prevent duplicate discounts in compliance with applicable law."

The letter also stated that AHA mischaricterized Sanofi's initiative as an attempt to limit 340B discounts. 

Hospitals argue that any move to withhold discounts hinders access for people who can't afford their medications and violates federal law that requires drugmakers to pay the discounts. 

"The federal government already has sufficient safeguards in place to avoid duplicate discounts under Medicaid and the 340B program. Particularly concerning is that the manufacturers' data requests unduly exceed the scope of these federal protections by including commercial and Medicare activity," said Bruce Siegel, CEO of trade group America's Essential Hospitals, in a statement

A group of hospitals, community centers and patient advocacy groups sent a letter to HHS Secretary Alex Azar in July asking him to stop drugmakers from eliminating the discounts.

The American Hospital Association sent letters to all five drug companies Aug. 21 expressing "profound concern" over the actions taken to limit 340B discounts. 

"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, which has further demonstrated the fractured, inadequate state of the prescription drug supply chain," the AHA wrote. 

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