Eli Lilly stops giving 340B discounts to contract pharmacies

Eli Lilly told hospitals Sept. 1 that it will no longer give 340B drug discounts to hospitals that ship the drugs to 340B contract pharmacies instead of dispensing them in house, according to documents obtained by 340B Report, a news site that focuses on the 340B program.

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. 

Eli Lilly said it will only give 340B discounts to covered entities and their child sites, not to contract pharmacies, as of Sept. 1, as a precaution to avoid duplicate discounts that could be offered at the pharmacies. Covered entities that don't have an in-house pharmacy can contact Eli Lilly regarding an exception, the company said.  

"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," Eli Lilly told 340B Report. 

The drugmaker gave an exception for insulin, saying it will still provide discounts on insulin to contract pharmacies as long as the pharmacy doesn't change the price. Eli Lilly said the insulin exception is in line with an executive order signed by President Donald Trump July 24, titled "Access to Affordable Life-Saving Medications." 

"Lilly shares the goal of ensuring that 340B patients directly benefit from the significant 340B discounts on Lilly insulins," the drugmaker said. 

In the last few months, at least five drugmakers have told hospitals they will be limiting 340B discounts, saying they're doing so to prevent paying duplicate discounts. 

AstraZeneca has also said it would stop giving discounts to hospitals that ship drugs to contract pharmacies instead of dispensing them in house. 

Seven hospital and pharmacy groups sent a letter to HHS Secretary Alex Azar Aug. 26 urging him to ensure drugmakers follow 340B rules.

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