340B Providers Cheer Bipartisan House Letter to HHS on Manufacturer Actions

Safety-net hospitals, health centers, and HIV/AIDS clinics yesterday applauded the 226 U.S. representatives—more than half of the House’s members—who signed Friday’s bipartisan letter to U.S. Health and Human Services (HHS) Acting Secretary Norris Cochran seeking “immediate action to ensure that manufacturers are prohibited from imposing unilateral changes to the program in direct conflict with congressional intent and decades of written guidance.”

HHS Secretary-designate Xavier Becerra was copied on the Feb. 26 letter. As California Attorney General, Becerra co-led a bipartisan coalition of 29 top state law officials in a December letter to then-HHS Secretary Alex Azar demanding federal action against the six drug manufacturers—Eli Lilly, AstraZeneca, Sanofi, Novartis, Novo Nordisk, United Therapeutics—that were the focus of Friday’s U.S. House letter.

The U.S. Senate Finance Committee will vote on Becerra’s nomination to head HHS tomorrow. It held a hearing on his nomination on Thursday. During the hearing, in response to a question from 340B provider ally Sen. John Thune (R-S.D.), Becerra pledged to commit himself to ensuring the strength of the 340B program. During a courtesy hearing before the Senate Health, Education, Labor, and Pensions (HELP) Committee on Wednesday, Becerra expressed his support for the recent legal HHS advisory opinion on contract pharmacy.

Reps. Abigail Spanberger (D-Va.), Cindy Axne (D-Iowa), Doris Matsui (D-Calif.), David McKinley (R-W.Va.), Dusty Johnson (R-S.D.), and John Katko (R-N.Y.) co-wrote the letter to Cochran and got their 220 House colleagues to sign. Including the six authors, the breakdown by party affiliation was 173 Democrats and 57 Republicans.

The letter urges Cochran to:

  • Begin assessing civil monetary penalties on manufacturers that deny 340B pricing to covered entities in violation of their obligations under the 340B statute
  • Require manufacturers to refund covered entities the discounts they have unlawfully withheld since 2020
  • Halt, through guidance or other means, any attempt to unilaterally change 340B upfront discounts to post-sale rebates
  • Immediately seat the 340B Administrative Dispute Resolution Panel to begin processing disputes within the program.

In the letter, the House members referenced the late December HHS advisory opinion finding manufacturers’ refusals to provide 340B discounts to covered entities’ contract pharmacies to be unlawful.

“Unfortunately, publishing the advisory opinion has not deterred manufacturers from continuing with unlawful price hikes,” they wrote. “Many covered entities are struggling with severe financial losses as a result of the COVID-19 pandemic. They cannot afford to be unfairly targeted by large pharmaceutical corporations or be forced to pay higher up-front costs for the drugs their patients need.”

“Furthermore,” the letter continued, “an information technology company has allied with manufacturers to change the 340B program from one of upfront discounts to post-sale rebates, a change that would greatly increase costs for covered entities and give manufacturers tremendous leverage over covered entities. Such action is inconsistent with HRSA’s long-standing guidance that the 340B program is an up-front discount program.”

Hospital groups American Hospital Association (AHA), Association of American Medical Colleges (AAMC), and 340B Health applauded the representatives for sending the letter, as did the National Association of Community Health Centers (NACHC) and Ryan White Clinics for 340B Access (RWC-340B).

“These manufacturers’ unilateral actions directly and dramatically undermine the 340B Drug Pricing Program and the vulnerable populations we serve, all while we are fighting not only the HIV/AIDS epidemic but also the COVID pandemic,” said RWC-340B President Shannon Stephenson.

“We applaud the bipartisan work of these leaders in Congress in pressing the Department of Health and Human Services to hold pharmaceutical companies accountable for violating their obligations under the law,” NACHC President and CEO Tom Van Coverden said.

AHA Executive Vice President Tom Nickels thanked the letter’s signers for protecting 340B “from big drug companies’ efforts to harm the program.” AAMC Chief Public Policy Officer Karen Fisher likewise thanked them for coming together “from both sides of the aisle…to protect the 340B program and patients who depend on it” from “an unwarranted attempt by several major drug companies to undermine this vital program.”

“A bipartisan majority has spoken loudly and clearly,” said 340B Health President and CEO Maureen Testoni. “It is time to stop the unlawful actions of these drug companies at the expense of safety-net hospitals and their patients.”