HHS Secretary Xavier Becerra told a Senate committee this morning his department has sent drug companies "a clear message" that if they violate the 340B statute, they will "pay the consequences."

Becerra’s Message to Pharma on 340B: “You Violate the Law, You Pay the Consequences”

U.S. Health and Human Services (HHS) Secretary Xavier Becerra told a U.S. Senate Appropriations subcommittee this morning that his department has sent “a clear message” to six drug manufacturers denying 340B discounts on drugs shipped to contract pharmacies “that we believe that they are violating the law.”

“You violate the law, you pay the consequences,” Becerra said.

Becerra was responding to Sen. Joe Manchin’s (D-W.Va.) observation about the companies’ 340B contract pharmacy actions, and Manchin’s question, “What are the next steps you will take as the head of HHS to ensure the integrity of the 340B program?” Becerra was appearing before the Senate Appropriations Labor-HHS-Education Subcommittee to answer questions about the Biden administration’s fiscal 2022 budget request for HHS. The administration wants to hike 340B program funding from $10.2 million to $17.2 million to strengthen program compliance. HHS also wants Congress to amend the 340B statute to give it general rulemaking authority over 340B and to let it audit covered entities to see how they use income from 340B drug purchases.

“The 340B program is for providing access to safe and affordable medications for low-income West Virginians and low-income all over our country,” Manchin said to Becerra. “Recently, HHS determined that six pharmaceutical companies have violated the program by restricting access to contract pharmacies. The undermining of the 340B program by pharmaceutical companies and pharmacy benefit managers has taken its toll on my West Virginia hospitals, community health centers, and their contract pharmacy partners. And I’m sure in every state, every one of us have been hit with this.”

“Senator, as you just said, we put out in writing—we didn’t just say verbally, we put out in writing—a clear message to these six manufacturers that we believe that they are violating the law,” Becerra said.

“Has it been turned over to DOJ [the U.S. Justice Department]?” Manchin asked.

“We’re waiting for responses. Some have responded, but we’re waiting for full responses,” Becerra said.

Becerra next made a pitch for the administration’s proposed $17 million budget for the U.S. Health Resources and Services Administration’s (HRSA) Office of Pharmacy Affairs (OPA), and HHS’s request for general rulemaking authority for HRSA over 340B.

“I hope that what you’ll do is give us more authority to actually to give clear guidance on what can be done and can’t be done on 340B,” the health secretary said.

“I hope, and I really think, that we could do that in a bipartisan way because we’re all being affected,” Manchin answered.

“That would be helpful, because this way the manufacturers can’t play the shell game with us,” Becerra said. “They know what their responsibility is.”

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