AbbVie facility gate
AbbVie this morning significantly tightened its restrictions on 340B pricing for hospitals, along the lines of Amgen and Johnson & Johnson's recent moves.

News Alert

AbbVie Puts Squeeze on 340B Pricing for Hospitals Akin to J&J and Amgen’s Recent Moves

Drug manufacturer AbbVie this morning significantly tightened its restrictions on 340B pricing for hospitals.

AbbVie has not yet responded to a request for comment about the changes. Non-hospital covered entities continue to be exempt from AbbVie’s pricing restrictions.

Drug manufacturers Amgen and Johnson & Johnson recently announced updates to their restrictions on 340B contract pharmacy arrangements similar to AbbVie’s.

Starting April 17, Abbvie will let hospitals lacking an in-house pharmacy designate just one contract pharmacy location. The hospital must submit data on claims for 340B-acquired drugs dispensed by the contract pharmacy to industry vendor 340B ESP. Also, the contract pharmacy must be located within 40 miles of the hospital parent site. “If a hospital covered entity is unable to identify an eligible contract pharmacy within 40 miles, AbbVie will work with the covered entity to identify a suitable alternative,” the company says in a March 29 document that hospital covered entities said they received this morning.

A question in an attached FAQ asks, “My covered entity is affiliated with an outpatient pharmacy that is registered with HRSA as a contract pharmacy. How will AbbVie’s policy impact this pharmacy location?”

AbbVie answers, “AbbVie will decline to facilitate bill to/ ship to orders for all contract pharmacies of hospital covered entities. Your covered entity should place orders for delivery to your covered entity’s in-house pharmacy. Hospital covered entities that do not have an in-house pharmacy, may choose to designate an affiliated contract pharmacy as its designated contract pharmacy location, provided it complies with the data submission and distance requirements described herein.”

AbbVie’s original policy, effective Feb. 1, 2022, covered 25 products, led by its blockbuster immunosuppressant Humira. The company added Imbruvica, its best-selling cancer medicine, to its restrictions effective April 1, 2022.

The new policy update applies to 90 AbbVie products, according to an attached FAQ. It appears that most, if not all, of AbbVie’s covered outpatient drugs are on new list of products to which the restrictions apply.

Under AbbVie’s original policy, the company agreed to ship affected products to an unlimited number of contract pharmacies if hospitals agreed to submit related claims data to 340B. Also, AbbVie let hospitals that refused to accept the company’s terms and that lacked an in-house outpatient pharmacy designate a single contract pharmacy to receive and dispense orders of 340B-purchased AbbVie drugs.

The new letter says, “Even if your hospital covered entity had previously designated a contract pharmacy location under AbbVie’s existing policy, you will need to access 340B ESP and designate one contract pharmacy location for AbbVie’s updated policy. Please do so prior to April 9, 2023.”

According to the FAQ, if a hospital’s in-house pharmacy is not in AbbVie’s limited distribution network for Imbruvica and Dupoa (the latter is a treatment for Parkinson’s disease), the hospital “may designate one of the specified contract pharmacy locations for receiving replenishment shipment of the product. AbbVie will facilitate bill to/ ship to orders to this designated pharmacy location.”

“Even if you had previously selected a designated one contract pharmacy location for Duopa or Imbruvica under AbbVie’s previous policy, your covered entity must still access 340B ESP
and select one designated pharmacy location for the limited distribution products under this updated policy,” the letter says. “Your designated pharmacy location for limited distribution products must be listed in 340B ESP by April 9, 2023 for the designation to take effect on April 17, 2023.”

AbbVie’s move may increase pressure on the government to take additional enforcement actions against the drug manufacturers that are increasing their restrictions. Last week, the hospital trade group 340B Health wrote to U.S. Health Resources and Services Administration Administrator Carole Johnson asking the agency to penalize J&J for what the group describes as an unlawful action that is contrary to the recent decision by U.S. Court of Appeals for the Third Circuit, according to 340B Health members attending the 340B Coalition winter conference in San Diego this week.

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