Bayer today significantly tightened its limits on 340B pricing when hospitals contract with pharmacies to dispense drugs to patients.

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Bayer Announces Tougher Limits on 340B Pricing for Hospitals

Drug manufacturer Bayer this morning significantly tightened its limits on 340B pricing when hospital covered entities contract with pharmacies to dispense drugs to patients. Grantee entities remain exempt from Bayer’s restrictions.

Covered entities reported receiving letters from Bayer about the changes via email messages from company contractor 340B ESP.

Effective June 1, Bayer will let hospital entities that lack an in-house pharmacy designate just one contract pharmacy location and it must be within 40 miles of the hospital parent site.

Bayer will no longer let hospitals place bill to / ship to replenishment orders for multiple contract pharmacies in exchange for submitting 340B claims to 340B ESP for Bayer drugs that these pharmacies dispense. Bayer said hospitals may voluntarily provide claims data for their single designated contract pharmacy through 340B ESP.

Bayer also is ending its policy exemption for contract pharmacies that are wholly owned by a 340B hospital or have common ownership with a health system.

Bayer’s original policy has been in place only since March 1. Bayer originally excluded 12 products: Adempas, Aliqopa, Jivi, Kerendia, Kogenate, Kovaltry, Kyleena, Lampit, Mirena, Skyla, Nubeqa, and Xofigo.

Bayer Adds Restriction To Pulmonary Hypertension Drug

Bayer today made Adempas subject to its 340B pricing restrictions. It is a pulmonary hypertension drug with federal Risk Evaluation and Mitigation Strategy distribution limits to ensure safe use. According to Bayer’s letter, hospitals “may designate an additional contract pharmacy location in Bayer’s limited distribution system, for the purposes of dispensing Adempas only.” An FAQ attached to the letter has more instructions for hospitals about designating an Adempas-only contract pharmacy. Bayer asked hospitals to voluntarily provide claims data through 340B ESP for their single designated contract pharmacy for Adempas.

“Covered entities must take action by May 18, 2023, in order for single contract pharmacy designations to take effect on the effective date of the policy,” Bayer said.

“Bayer supports the 340B program and its intended mission of supporting safety net healthcare providers in providing vulnerable patients with access to medical care and medications,” the company said in its letter. “Unfortunately, the program has strayed far from its original purpose and the current use of contract pharmacies is beyond the parameters of the statutory scheme, as the U.S. Court of Appeals for the Third Circuit has held. Bayer is concerned with the integrity issues that arise from contract pharmacy arrangements, and we believe meaningful improvements are needed to ensure that safety net providers and vulnerable patients come first.”

Today also is the effective date of Pfizer, GlaxoSmithKline, and Novartis’ previously announced updates to their limits on 340B pricing involving the use of contract pharmacies.

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