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The 340B program has “strayed far from its original purpose, creating a profit stream that is enriching middlemen versus benefiting patients,” Bayer says.

Bayer: 340B “Is Enriching Middlemen Versus Benefitting Patients”

While the 340B program “has merit when used as intended,” it has “strayed far from its original purpose, creating a profit stream that is enriching middlemen versus benefitting patients,” drug manufacturer Bayer told 340B Report yesterday.

Bayer gave the statement to 340B Report late yesterday in response to a request to elaborate on its decision to impose conditions on 340B pricing when hospitals use contract pharmacies. Its statement arrived too late to be included in our Feb. 1 article about its new policy.

A Bayer spokesperson said:

“Bayer will continue to offer 340B discounts to ALL eligible covered entities.

The 340B drug pricing program was created to provide vulnerable patients with access to medications they might not be able to afford. The industry has provided billions of dollars in steep discounts on medicines to safety-net clinics and qualifying hospitals expecting that these entities would use the savings to help patients in financial need. But the program has strayed far from its original purpose, creating a profit stream that is enriching middlemen versus benefitting patients.

We believe that the program has merit when used as intended: when entities that appropriately qualify receive the discounts and pass them on to patients. We believe meaningful improvements are needed, including clearly defining who benefits, increasing reporting transparency for how covered entities use their discounts, and revisiting the role of contract pharmacies. Patients need to come first.”

Grantee covered entities are exempt for Bayer’s new conditions.

Beginning March 1, Bayer will ship 340B-priced drugs only to hospital locations registered as a 340B covered entity or child site location affiliated with that hospital. It said it will let hospitals lacking an in-house pharmacy capable of dispensing 340B-priced drugs to their patients designate a single contract pharmacy location. Hospitals can apply for exemptions to the conditions for their wholly owned contract pharmacies. Hospitals may continue to use multiple contract pharmacies to dispense Bayer products if they agree to submit all associated claims to industry vendor 340B ESP.

A few hours after Bayer announced its new policy, drug manufacturer EMD Serono announced an even tougher 340B pricing policy that, like Bayer’s, applies to hospital covered entities only.

EMDS’s policy, effective March 1, applies only to its products Refib (interferon beta-1a) and Gonal-f (follitropin alfa for injection). The company said it will ship Refib and Gonal-f bought at the 340B price only to locations registered as 340B covered entities or to eligible child site locations. Hospitals lacking an in-house dispensing pharmacy can designate a single contract pharmacy for bill to/ship to replenishment orders of Rebif and Gonal-f. It is using industry contractor 340B ESP to process these pharmacy designations. Hospitals can apply for exemptions to the policy for their wholly owned contract pharmacies.

EMDS is not letting hospitals continue to use multiple contract pharmacies in exchange for giving the company their relevant claims data for contract pharmacy utilization. An EMDS spokesperson told 340B Report that yesterday’s policy announcement was unrelated to the Third Circuit Court’s Jan. 30 ruling.

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