Bayer Healthcare Pharmaceuticals starting March 1 is imposing limits on hospitals’ replenishment orders of 340B-priced drugs shipped to contract pharmacies. It said it is voluntarily letting 340B grantee covered entities continue to use multiple contract pharmacies to dispense 340B drugs.
340B hospital pharmacy executives received letters about Bayer’s new policy this morning. They arrived just two days after a federal appeals court ruled that the 340B statute does not require drug makers to deliver discounted 340B drugs to an unlimited number of contract pharmacies.
Bayer did not immediately respond to a request for comment. It is not known if the U.S. Third Circuit Court of Appeals’ Jan. 30 ruling influenced Bayer’s decision. Bayer is the 20th drug manufacturer to adopt such a policy. Some manufacturers have exempted federal grantees and others have applied the restrictions to all covered entities. The Third Circuit ruling, which came in cases involving AstraZeneca, Novo Nordisk, and Sanofi’s 340B contract pharmacy policies, may encourage other drug manufacturers to impose similar restrictions.
A federal appeals court in Washington, D.C., is expected to rule soon in similar cases against the government brought by Novartis and United Therapeutics. An appeals court in Chicago likewise is expected to rule soon in a case filed by Lilly.
“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 letter said. “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. 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.”
Bayer said the following products are not subject to its policy “at this time”: Adempas, Aliqopa, Jivi, Kerendia, Kogenate, Kovaltry, Kyleena, Lampit, Mirena, Skyla, Nubeqa, and Xofigo.
Bayer said effective March 1 it “will provide products purchased at the 340B price only to locations registered as a 340B covered entity or child site location affiliated with that covered entity.” 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. Such claims must be submitted within 45 days of the dispense date. Bayer did not say what it will do with the claims data. Hospitals that decline to share their data must use the 340B ESP platform to designate their one permitted contract pharmacy.
Maureen Testoni, president and CEO of hospital group 340B Health, criticized Bayer’s new policy. “By following the lead of the other 19 companies with 340B pricing restrictions, Bayer will add to the well-documented levels of harm that these actions are causing to patient access and health outcomes,” she said.
Biogen was the last drug manufacturer to impose 340B contract pharmacy restrictions. Its policy took effect today.