The American Hospital Association is urging CMS to adjust its newly established drug price negotiation program, arguing the agency’s current approach conflicts with 340B programs.
In a May 1 open letter to Kim Brandt, CMS’ COO, the hospital member group outlined concerns over a retrospective process established by the Biden administration to capture the maximum fair price of negotiated medications. The process, dubbed the Medicare Transaction Facilitator, compels medication dispensers to participate in the MTF payment module, but drugmakers are exempt.
“The retrospective process is complex, overly burdensome and operationally unworkable, particularly with respect to the critical 340B drug pricing program,” the AHA said.
“By allowing drug manufacturers to deny upfront access to the [maximum fair price] or the 340B price and forcing dispensing entities to participate in a retrospective process designed by the manufacturers themselves, this process unfairly disadvantages patients and the providers who serve them in favor of the drug manufacturers whose pricing practices necessitated legislative intervention in the first place,” according to the letter.
Some drug manufacturers, including Johnson & Johnson and Sanofi, said they plan to implement a rebate structure to the federal 340B program. Following industry pushback, the companies filed lawsuits against HHS and the Health Resources and Services Administration, which blocked the rebate plans. The litigation is ongoing.
The AHA, which filed an amicus brief in a lawsuit against the 340B rebate plans, asked CMS to finalize a process for medication dispensers to prospectively access the maximum fair price and 340B price of therapies. The first 10 negotiated drug prices are scheduled to go into effect Jan. 1, 2026.