340B hospitals looking to use Xifaxan could soon have to pay thousands for the commonly used hepatic encephalopathy and irritable bowel syndrome treatment, with Bausch Health removing the medication—along with several of its other drugs—from the 340B program and Medicaid effective Oct. 1.
Xifaxan, which was selected for 2027 price negotiations under the Inflation Reduction Act (IRA), is just one medication associated with the 12 labeler codes that the Canadian pharmaceutical company has moved to terminate from the federal drug pricing and health care insurance programs next month.
The terminations will affect hundreds of products associated with many of Bausch’s NDCs for 340B-eligible drugs. Several NDCs associated with 340B products for Bausch + Lomb, the company’s eye care-focused subsidiary from which it’s sought to separate, did not appear to be affected by the terminations.
William von Oehsen, principal at Powers Pyles Sutter & Verville who has represented 340B providers since the 340B law was enacted over three decades ago, told 340B Report that manufacturers cannot pick and choose national drug codes (NDCs) for terminations because “when a manufacturer executes a rebate agreement or a [pharmaceutical pricing agreement], it obligates itself to provide the Medicaid rebate/340B discount on its full product line.”
“But it could sell specific NDCs to another company, which is perhaps what is going on here,” he said.
A Bausch spokesperson did not respond to 340B Report’s multiple requests for comment on the terminations or provide clarity on whether the manufacturer has completely removed its products from Medicaid and 340B.
However, the company noted on the website for its Patient Assistance Program that “Bausch Health US, LLC (‘BHC’) recently communicated its intention to cease participation in two optional federal drug pricing programs—the Medicaid Drug Rebate Program (‘MDRP’) and the 340B Drug Pricing Program (‘340B’), effective October 1, 2025.”
Why it Matters
Sources told 340B Report that while quarterly drug terminations are relatively common, Bausch’s recent actions are significant given their implications for providers. And it could signal a new trend among manufacturers that have high-cost, single source brand drugs with deeper 340B discounts.
Without many Bausch medications available at 340B prices, covered entities looking to treat patients with the soon-to-be terminated NDCs may have to purchase affected drugs at wholesale acquisition cost (WAC)—which one source told 340B Report could cost more than $3,000 for Xifaxan, alone. There is no generic alternative for Xifaxan.
“Covered entities are already facing enough restrictions with contract pharmacy restrictions and upcoming changes to the 340B program through the rebate model and [maximum fair price (MFP)]/IRA implementation. This is also on top of things like impending Medicaid cuts,” said the source, who requested anonymity to speak freely. “Should other manufacturers follow suit with Bausch, it could have compounding financial effects on these programs that rely on savings to continuing caring for patients in their communities.”
Greg Wilson, director of pharmacy services, compliance and client solutions for the 340B provider consulting firm SpendMend, agreed that “this may be a sign of volatility to come in the industry, especially as manufacturers navigate the complex web of both established and emerging drug pricing policies from the [Medicaid Drug Rebate Program (MDRP)] and 340B, to the IRA-mandated Medicare Drug Price Negotiation program to the more recent call from the Trump administration to explore ‘Most Favored Nation’ (MFN) pricing strategies.”
The Details
Bausch Health and its gastroenterology business, Salix Pharmaceuticals, did not appear to formally announce the terminations in a news release. However, the drug company noted on the website for Xifaxan that “Bausch Health and Salix will cease its participation in two optional federal drug pricing programs (the Medicaid Drug Rebate Program and the 340B pricing program) effective October 1, 2025.”
“The company remains committed to Medicaid patients who have been prescribed our products and to maintaining continuity of treatment,” Bausch stated. “Medicaid patients whose plans no longer provide coverage for our products may be eligible for Xifaxan through our Patient Assistance Program.”
Health Resources and Services Administration’s (HRSA) 340B Office of Pharmacy Affairs (OPA) Information System filings noted Bausch’s decision to voluntarily withdraw labeler codes for Xifaxan and other medications from the MDRP. The terminations will take effect on Sept. 30 for OPA and Oct. 1 for the Centers for Medicare and Medicaid Services (CMS).
CMS also listed the terminations on its Medicaid website.
The affected NDCs include: 25010, 16781, 57782, 65649, 00095, 00187, 00884, 13548, 66490, 68012, 68682 and 99207.
Xifaxan, which uses the NDC 65649, drove growth in Bausch’s Salix segment in the second quarter of 2025, the company announced in its July earnings report. The drug saw 10% revenue growth during the quarter compared to the same period of 2024.
Bausch previously faced criticism for increasing the net price for Xifaxan by 12% from 2020 to 2021, Fierce Pharma reported in 2022.
IRA Tie-In
CMS on Jan. 17 selected Xifaxan as one of the 15 drugs covered under Medicare Part D for the second round of IRA drug price negotiations. The agency will negotiate the MFP with manufacturers, which will take effect in 2027.
The 12 drugmakers behind those selected drugs signed agreements in March that initiated the negotiation period with CMS.
Under the IRA, which authorized the negotiations, drugmakers must offer covered entities the lower of the MFP or the 340B ceiling price, but not both. The law provided little detail on how to identify 340B claims and avoid duplicate discounts.
Both drugmakers and 340B providers have criticized CMS’ inaction on conflicts that arise between the intersection of the 340B program and the IRA, and attorneys previously told 340B Report that it could lead to more “manufacturer-friendly” compliance models.
Five large pharmaceutical companies— Johnson & Johnson, Eli Lilly, BMS, Sanofi and Novartis—have sued HRSA to impose 340B rebate models that the agency has not approved. In turn, HRSA has released a controversial proposed 340B rebate pilot program, in which manufacturers of the first 10 drugs subject to Medicare drug price negotiations in 2026 can apply to implement a 340B rebate model if they meet the agency’s criteria.
The first round of negotiated drug prices and the federal 340B rebate pilot model are set to take effect on Jan. 1, 2026.
Editor’s Note: SpendMend and Powers are 340B Report sponsors. 340B Report maintains full editorial independence in its news coverage. View 340B Report’s editorial policy.
