A senior federal health official informed drug manufacturer Boehringer Ingelheim (BI) today its restrictions on 340B pricing when hospitals use contract pharmacies are illegal and must end immediately, or BI could face civil monetary penalties.
U.S. Health Resources and Services Administration (HRSA) Acting Administrator Diana Espinosa sent BI the violation letter today. We have reached out to the company for comment.
BI announced its new 340B contract pharmacy policy in late June. Effective Aug. 1, the company stopped shipping 340B-purchased drugs to hospitals’ contract pharmacies.
BI lets hospitals without an in-house pharmacy designate a single contract pharmacy location to receive and dispense BI products. Hospitals must register with drug manufacturer vendor 340B ESP to make their contract pharmacy designation.
Community health centers, HIV/AIDS clinics, and other federal grantee covered entities are exempt from BI’s policy, for now. It applies to all BI products except the company’s specialty drugs OFEV, Gilotrif, and Praxbind.
HRSA gave BI until Oct. 18 to update the government on its plan to comply with the violation letter.
Eight drug manufacturers have announced 340B contract pharmacy restrictions since July 2020—AstraZeneca, BI, Lilly, Merck, Novartis, Novo Nordisk, Sanofi, and United Therapeutics. BI and Merck were the most recent to do so. Merck’s policy, which also covers hospitals only, took effect Sept. 1.
HRSA has told the other six their policies are illegal and must be stopped and that the companies must refund entities for overcharges. It said failure to comply could result in penalties of up to $5,883.00 for each instance of overcharging. HRSA likely is gathering and assessing covered entity complaints against Merck now. It is expected to send Merck a similar violation letter.
Six of the eight manufacturers are suing HRSA over its findings—AstraZeneca, Lilly, Novartis, Novo Nordisk, Sanofi, and United Therapeutics. BI probably will sue HRSA soon as well.
Hospital group 340B Health commended HRSA “for taking quick enforcement action” against BI and called on BI executives “to heed the government’s directive.”
