Starting May 15, biopharmaceutical manufacturer Exelixis will require 340B covered entities that want past drug purchases that were not made at the 340B ceiling price to be reclassified as 340B sales to do so within 45 days of the date that the drug was dispensed.
Exelixis informed covered entities about the change in May 2 letter that entities reported getting by email late yesterday. As of late this morning, the letter had not yet been posted on drug industry vendor 340B ESP’s website.
Exelixis makes and sells just two relatively expensive cancer drugs taken orally—Cometriq for advanced thyroid cancer and Cabometyx for advanced kidney, liver, or thyroid cancer. In June 2022, it imposed conditions on 340B pricing for hospitals that use contract pharmacies. Grantee entities are exempt. Due to the federal law that excludes 340B pricing on orphan drugs for critical access hospitals, sole community hospitals, rural referral centers, and free-standing cancer hospitals, Exelixis’ contract pharmacy restrictions apply just to 340B disproportionate share hospitals and children’s hospitals.
Under that policy, DSH and children’s hospitals without an in-house pharmacy can designate one contract pharmacy for Cometriq and Cabometyx shipments from among the specialty pharmacies in Exelixis’ limited distribution networks for the products. There is an exemption for hospitals’ wholly owned contract pharmacies. If hospitals wish to keep using multiple contract pharmacies, they must provide claims data to 340B ESP.
Other manufacturers with 340B contract pharmacy restrictions either included 45-day limits for replenishment orders (or claims submissions to 340B ESP) in their restrictions or added them later.
The new letter’s wording indicates that all providers that can buy Cometriq and Cabometyx at the 340B ceiling price—DSH hospitals, children’s hospitals, and grantee covered entities—will have to abide by the new 45-day limit for replenishment and reclassification requests. Exelixis has not yet responded to a request for clarification.
“Exelixis receives a significant volume of requests to replenish/reclassify at the 340B ceiling price product that was originally purchased and dispensed months, and sometimes years, prior,” the letter said. “We are concerned that these lagged replenishment/reclassification requests complicate Exelixis’ procedures for estimating sales and inventory and increase the risk of program integrity violations such as duplicate discounting.”
The letter notes that Cometriq and Cabometyx are sold in 30-count bottles. “Based on typical prescribing and dispensing patterns, we expect that covered entities that dispense Cometriq or Cabometyx will dispense a full bottle within a forty-five day period and thus can place associated replenishment orders within this timeframe,” it said.