HRSA Acting Administrator Diana Espinosa sent letters this morning to six drug manufacturers telling them their 340B contract pharmacy policies are illegal and must be stopped immediately.

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BREAKING: HRSA to Six Drug Makers—Your 340B Contract Pharmacy Policies Are Illegal, Resume Offering 340B Pricing Immediately

U.S. Health Resources and Services Administration (HRSA) Acting Administrator Diana Espinosa this morning informed six pharmaceutical manufacturers that their restrictions on 340B program pricing to covered entities that dispense medications through contract pharmacies have resulted in overcharges and are in direct violation of the 340B statute.

HRSA announced its decisions about the companies’ policies on the Office of Pharmacy Affairs home page. It was a major turning point in the nearly year-long fight over whether drug makers are obligated to offer 340B pricing on their products when covered entities use contract pharmacies to dispense them. HRSA said it “has conducted a review of these actions and an analysis of complaints received from covered entities, resulting in today’s letters.”

“[The drug manufacturer] must immediately begin offering its covered outpatient drugs at the 340B ceiling price to covered entities through their contract pharmacy arrangements…” Espinosa wrote in the letters. “[The drug manufacturer] must comply with its 340B statutory obligations and the 340B Program’s [Civil Monetary Penalties] CMP final rule and credit or refund all covered entities for overcharges that have resulted from [this] policy. . . . Continued failure to provide the 340B price to covered entities utilizing contract pharmacies, and the resultant charges to covered entities of more than the 340B ceiling price, may result in CMPs as described in the CMP final rule.”

“The 340B Program Ceiling Price and Civil Monetary Penalties final rule states that any manufacturer participating in the 340B Program that knowingly and intentionally charges a covered entity more than the ceiling price for a covered outpatient drug may be subject to a Civil Monetary Penalty (CMP) not to exceed $5,000 for each instance of overcharging,” HRSA said in its website post. “Assessed CMPs would be in addition to repayment for an instance of overcharging.”

HRSA sent letters to drug manufacturers AstraZeneca, Eli Lilly, Novartis, Novo Nordisk, Sanofi, and United Therapeutics.

This is a developing story. Check back for updates later today.

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