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Feds tell pharma companies to pony up 340B discounts, but it’s unclear whether they will

Drugmakers and healthcare providers have been battling for months over 340B discounts on medicines delivered through contract pharmacies, and now HHS has stepped in to settle the argument: Discounts apply even when drugs are dispensed off-campus. But pharma companies might not be quick to fall in line.

Several drug companies last year rolled out new rules on 340B-discounted medicines delivered through contract pharmacies, but the HHS Office of the General Counsel last week issued an advisory opinion stating the discounts must be offered regardless of where patients actually collect their meds.

The HHS’ new advisory opinion doesn’t carry the force of law, but instead communicates the agency’s views on the issue. Drugmakers, for their part, either say they’re reviewing the opinion or plan to stick to their own new policies.

The opinion follows a months-long dispute between drug companies and 340B groups over the new restrictions. Drug companies have argued the 340B program has grown beyond its original intent and that contract pharmacies don’t always pass discounts to patients. Some companies have started collecting de-identified claims data to ensure the program is working as intended, and others have prohibited discounts through contract pharmacies. 

Patient advocates and hospitals are fighting back. Patients protested outside AstraZeneca’s U.S. headquarters in Delaware, and the nationwide group Ryan White Clinics for 340B Access sued HHS to force the agency’s hand. In December, national hospital and pharmacist groups sued HHS to stop drug company moves that they argue “undermine” the program. 

On Tuesday, a Sanofi spokeswoman said the company isn’t changing its policy of collecting de-identified claims data to monitor 340B discounts. The company supports 340B’s “core objective of increasing access to outpatient drugs for uninsured and vulnerable populations,” but “waste and abuse … has become increasingly prevalent” in recent years, she said, citing audits that have found duplicate discounts.

“If a covered entity provides these data necessary to identify and prevent waste and abuse then nothing will change,” she added. “If a covered entity chooses not to provide the limited data, it will remain able to purchase 340B-priced drugs for shipment to its own facilities, including all community health centers with in-house pharmacies.”

Patients don’t always benefit from discounts to contract pharmacies, Sanofi’s spokeswoman said, adding that 340B providers themselves are “much more likely” to pass the discounts on, she added. 

The federal government has said including contract pharmacies in the program is important because not all providers have in-house pharmacies, and that it would be impractical to force them to develop those services while existing partnerships are readily available.

For its part, AstraZeneca is reviewing the new opinion and has “not made any decisions regarding additional changes to our program,” a spokesman said. The company’s products are “available to all covered entities at or below applicable statutory ceiling prices through either their own on-site dispensing pharmacy or a designated contract pharmacy.” 

Likewise, Novartis is assessing the HHS opinion “and its implications,” a spokesman said, adding that the company supports the program, but believes reform is needed.

“Contract pharmacies have expanded exponentially over the past decade without strong controls or oversight in place,” he added. “The unfortunate reality is that the overwhelming majority of discounts from medicines dispensed at pharmacies are not shared with patients.  These discounts benefit for-profit pharmacies, third-party administrators, other middlemen and hospitals with no requirement that those funds be used for charitable care at hospitals.”