Drug manufacturer Merck has begun informing 340B covered entities that, effective Sept. 1, it will stop providing 340B pricing to hospitals on its drugs shipped to contract pharmacies, if the hospitals do not provide their 340B claims data.

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Breaking: Merck Will End 340B Contract Pharmacy Pricing for Hospitals That Don’t Share their Claims Data

Drug manufacturer Merck has begun informing 340B covered entities that, effective Sept. 1, it will stop providing 340B pricing to hospitals that partner with 340B contract pharmacies unless the hospitals share 340B claims data with its vendor 340B ESP.

Hospitals lacking an outpatient, on-site dispensing pharmacy may designate a single contract pharmacy, the company says. Physician administered drugs are not included under the policy.

HRSA Grantees Spared “At this Time”

In an Aug. 11 notice to covered entities, Merck says “at this time” its new policy “does not apply to federal grantee covered entities.”

“We continue to encourage federal grantee covered entities to collaborate with us as part of this program integrity effort by participating in the Merck Program and providing claims-level data for contract pharmacy transactions and we will continue to evaluate program participation of federal grantees to determine if further action is warranted.”

On Aug. 1, Boehringer Ingelheim stopped shipping 340B-purchased drugs to hospitals’ contract pharmacies. Unlike Merck, it does not waive its policy for entities that hand over their contract pharmacy claims data.

Six other manufacturers either have ceased providing 340B pricing when covered entities use contract pharmacies, or condition 340B pricing on provision of claims data—Eli Lilly, AstraZeneca, Sanofi, Novartis, Novo Nordisk, and United Therapeutics. All six are suing the U.S. Health Resources and Services Administration (HRSA) and the U.S. Health and Human Services Department (HHS) over HRSA’s position that the companies’ policies have resulted in overcharges and violate the 340B statute.

In July 2020, Merck encouraged covered entities to voluntarily supply their 340B contract pharmacy claims data to 340B ESP so the claims could be checked for duplicate 340B discounts and Medicaid and commercial rebates on the same products. At the time, Merck said absent significant cooperation from covered entities, it might take further action “which may include seeking 340B program claims information in a manner that will be substantially more burdensome for covered entities.”

In March this year, it sent covered entities a follow-up letter “to express our hope that covered entities will participate in this initiative.”

Neither Merck, 340B ESP, nor HRSA have yet responded to requests for comment.