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RWC-340B says Johnson & Johnson’s new conditions on 340B-purchased drugs when hospitals use contract pharmacies apparently applies also to hospitals’ non-340B-purchased “own use” drugs.

340B Advocacy Group Expresses Concern About Apparent Unique Feature in J&J’s Contract Pharmacy Policy

Drug manufacturer Johnson & Johnson’s new conditions on 340B-purchased drugs when hospitals use contract pharmacies apparently apply also to hospitals’ non-340B-purchased “own use” drugs, the group Ryan White Clinics for 340B Access has told its members.

J&J has not responded to a request for comment on RWC-340B’s interpretation of its policy

A 1936 federal antitrust law, the Robinson-Patman Act, outlaws some forms of price discrimination. In a March 23 email alert to members, RWC-340B observed that a 1938 law, the Non-Profit Institutions Act, lets drug manufacturers offer preferential pricing on drugs without violating the Robinson-Patman Act “as long as the purchaser is a non-profit institution, like a non-profit hospital, and the discounted drugs are limited to the institution’s ‘own use.’”

Many nonprofit hospitals take advantage of the “own use” exemption to federal price discrimination laws to charge employees, retirees, and their dependents less for drugs than they do other patients.

“The Federal Trade Commission has clarified that non-profit hospitals are allowed to establish contract pharmacy arrangements for non-340B ‘own use’ drugs if the use is a part of and promotes the hospital’s intended institutional operation,” RWC-340B continued.

“J&J apparently intends to apply its 340B contract pharmacy restrictions to contract pharmacy arrangements involving non-340B ‘own use’ drugs. We are not aware of any other manufacturer that has taken that step,” RWC-340B said.

J&J announced its 340B contract pharmacy policy on March 21. It is the 16th drug company to adopt such a policy.