Efforts to Stop Drug Companies’ Abuse of 340B Program Accelerate

Posted on September 25, 2020

As drug companies increasingly attempt to limit hospital and community clinics' use of 340B contract pharmacy arrangements to lower drug prices, U.S. Sens. Debbie Stabenow and Gary Peters recently joined many of their colleagues in asking the U.S. Department of Health and Human Services (HHS) to penalize those that set prices at levels higher than permitted by the federal 340B Drug Pricing Program. The program requires drug companies to sell discounted prescription drugs to entities that provide care in underserved communities.

A Sept. 22 news release from the senators’ offices quotes MHA CEO Brian Peters saying, “Michigan hospitals are busy trying to save the lives of COVID-19 and other patients while they face extreme financial hardship from the pandemic; they should not have to worry about drug companies eliminating 340B discounts in direct violation of current regulations.”

In a positive step on this topic, the HHS’ general counsel sent a strongly worded letter Sept. 21 to the general counsel of drug manufacturer Eli Lilly. The letter was in response to Lilly’s request for a pre-advisory advisement opinion regarding its new policy to limit the providers to which it would offer pricing discounts under the 340B program.

The letter notes that the Health Resources and Services Administration has already directly expressed significant concerns regarding the drug manufacturer's new policy and is continuing its review. The HHS’ general counsel states that Lilly cannot view the absence of questions from the government as an endorsement of its policy and that potential litigation is possible if it "knowingly violates a material condition of the program that results in over-charges to grantees and contractors."  

The American Hospital Association plans to continue its advocacy to end manufacturers’ abusive practices, and the MHA will share further developments with members as they become available. For more information, contact Laura Appel at the MHA.

Tags: 340B Drug Pricing Program, Laura Appel, Debbie Stabenow, American Hospital Association, Gary Peters, U.S. Department of Health and Human Services

Posted in: Member News

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