Drug manufacturer Gilead will voluntarily extend 340B pricing to critical access hospitals, sole community hospitals, and rural referral centers on Veklury (remdesivir), its injectable antiviral treatment for COVID-19, the company said late Tuesday.
The U.S. Food and Drug Administration (FDA) late last week approved Veklury for administration to outpatients with mild-to-moderate COVID-19. It previously was approved for inpatient administration only. 340B discounts apply to covered outpatient drugs only. The FDA’s decision meant that 340B pricing became available for the first time on Veklury, which is in very high demand now due to shortages of other therapies.
Health care services and group purchasing company Vizient reported yesterday that its members spent more than $1 billion in the fourth quarter of 2021 on remdesivir, more than on any other drug.
Some health systems said this week they were unsure if the extension of 340B pricing to Veklury would apply to the categories of hospitals that gained eligibility for 340B in 2010.
The same law that added the new categories of hospitals to 340B also said that manufacturers are not required to provide 340B pricing to these hospitals on drugs designated for a rare disease or condition, better known as orphan drugs. A pair of federal district court rulings in 2014 and 2015 clarified that the 340B orphan drug exclusion does not depend on whether a drug is used to treat disease or condition for which it received an orphan designation.
Veklury under its generic name remdesivir has an FDA orphan drug designation for the treatment of Ebola. It is on the U.S. Health Resources and Services Administration’s (HRSA) Orphan Drug Designation List, the official registry of products to which the 340B orphan drug exclusion applies.
Researchers Kao-Ping Chua, M.D., and Rena Conti pointed out in a June 2020 article in Health Affairs Blog that remdesivir’s orphan designation for Ebola “means that 340B facilities subject to the exemption for orphan-designated drugs would not be entitled to discounts on any approved outpatient formulations of remdesivir.”
“Like other sponsors of orphan-designated drugs, Gilead could choose to provide the discount but would not be obligated to do so,” Chua and Conti said.
Gilead late on Jan. 25 confirmed to 340B Report, “We are foregoing the orphan drug exception for those types of covered entities.”
The National Rural Health Association (NRHA) yesterday said it “is pleased to see the decision Gilead made in voluntarily providing rural hospitals important 340B priced drugs.”
“Foregoing the orphan drug exception on their own should be viewed as the standard for other drug manufacturers to ensure availability for rural providers,” NRHA said. It added that it “continues to push” for U.S. Reps. Peter Welch (D-Vt.) and David McKinley (R-W.Va.) bill to let critical access hospitals, sole community hospitals, rural referral centers, and free-standing cancer hospitals access 340B pricing on drugs designated for orphan diseases or conditions when the drugs are prescribed for common diseases or conditions.
“This legislation will go a long way toward protecting the solvency of the 340B drug pricing program,” NRHA said.
Nate Awrich, network vice president of pharmacy operations for The University of Vermont Health Network, said the health system is not using remdesivir yet in an outpatient context but “we’re working on it and expect it will be appropriate and necessary for some patients due to shortages of other agents.”
“Our hospitals are in a very difficult position financially due to the demands of COVID and many serious workforce shortages leading to extraordinary costs for contract traveling staff,” Awrich said. “Some manufacturers seem to see this moment as a great opportunity to diminish the viability of safety net health care providers in the U.S. I’m thankful that Gilead recognizes the role of 340B in supporting critical health care functions in the midst of the pandemic and hope that other manufacturers may follow their example.”
