Drug manufacturer Sanofi has sent letters to 340B covered entities that have complained to federal authorities about its denials of 340B pricing on drugs shipped to contract pharmacies, covered entity representatives say.
Sanofi has acknowledged but not responded to requests for comment about its reason for sending the undated letter and an attached FAQ document to entities. 340B Report reached out to Sanofi after obtaining a copy of the letter early this month.
The company requires health centers, disproportionate share hospitals, critical access hospitals, rural referral centers, and sole community hospitals to upload their 340B contract pharmacy claims data to a vendor, 340B ESP, to continue getting 340B pricing on Sanofi products shipped to contract pharmacies. If an entity declines, it can continue to buy Sanofi products at the 340B price when shipped to an address registered on the 340B covered entity database as a parent or child site. If an entity lacks an in-house pharmacy, it can designate a single contract pharmacy for Sanofi product shipments.
In May, the U.S. Health Resources and Services Administration (HRSA) told Sanofi that its 340B policies were illegal. HRSA instructed it to resume shipments 340B contract pharmacies arrangements without conditions and to repay covered entities for overcharges. Continued noncompliance could result in civil monetary penalties, it said.
Sanofi is suing HRSA and the U.S. Health and Human Services Department (HHS) over HRSA’s May 17 finding. In a brief it filed in July, Sanofi complained that HRSA never shared with it covered entities’ complaints about the company’s requirements. Nor did HRSA ask Sanofi for its responses to the complaints, the company told the court. HRSA, Sanofi said, arbitrarily and capriciously decided that the company violated the law based on entities’ complaints “without ever providing Sanofi with an opportunity “to see or rebut those complaints.”
It is not known whether Sanofi’s recent letters to covered entities are connected to these points it made in its legal brief.
In the new letter to complainants to HRSA, Sanofi restates its 340B contract policy, expresses appreciation to the recipient for “your cooperation in ensuring integrity in the 340B program through this initiative,” and says it “value[s] our relationship with you very much.”
In the attached FAQ, it says its 340B contract pharmacy policy’s purpose “is to address duplicate Medicaid rebates as well as ineligible rebates paid to commercial and Medicare Part D payers.”
“Sanofi utilizes the claims data provided by 340B covered entities to address these duplicate
discounts,” it says. “All forms of duplicate discounts impair the sustainability of the 340B Program, so all must be addressed. The 340B statute permits this approach because Sanofi will continue to offer 340B pricing to covered entities outside contract pharmacy arrangements, regardless of whether data is provided.”
340B providers would strongly dispute this legal interpretation, pointing out that the duplicate discount prohibition only applies to Medicaid fee for service drugs.
In response to the question, “What benefit does the 340B covered entity realize by using 340B ESP,” Sanofi answers, “By providing 340B claims data that originate from contract pharmacies, you will enable Sanofi to definitively identify duplicate Medicaid rebates. Covered entities will then be informed which pharmacies are dispensing 340B purchased drugs to Medicaid patients. This information can be used to further strengthen the audit processes and compliance controls of the covered entity.”
