screenshot of HRSA correspondence to stakeholders web page
HRSA and OIG have no comment on the status of drug manufacturer civil monetary penalties and violation letters stemming from denials of 340B pricing to covered entities that use contract pharmacies.

HHS OIG and HRSA Are Mum About 340B Manufacturer Civil Monetary Penalties and Violation Notices

The U.S. Department of Health and Human Services Office of Inspector General said yesterday it has no comment on the status of referrals from the U.S. Health Resources and Services Administration to fine eight drug manufacturers for failing to offer 340B prices to providers that use contract pharmacies. Six of the referrals from HRSA are more than a year and a half old.

“OIG does not comment publicly on potential or pending enforcement matters,” a spokesperson said. “However, in all matters, OIG carefully considers all facts and circumstances when determining whether to pursue civil monetary penalties.”

340B Report broke the news late last summer that the OIG would wait to see how the federal appeals courts rule on the matter before deciding what to do. An appeals court held in January that drug makers did not have to deliver discounted 340B drugs to an unlimited number of contract pharmacies. Two more appellate decisions are expected at any time.

HRSA, meanwhile, said Tuesday it has no comment about whether it will refer three more manufacturers to OIG that have refused to comply with 340B program violation notices about their 340B contract pharmacy policies.

The penalty in 2022 for each instance of overcharging a 340B covered entity was $6,323. The amount for this year has not yet been announced.

HRSA on Tuesday also had no comment about whether it is investigating and will send 340B program violation notices to more 10 companies that are withholding 340B pricing in the contract pharmacy sphere.

21 Companies Restrict 340B Pricing

Twenty-one drug makers have imposed conditions on 340B pricing since the summer of 2020. Bayer and EMD Serono were the last to say they were doing so, both on Feb. 1. Six have tightened their conditions since January.

HRSA so far has sent 340B violation notices to just 11 of the 21: AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Lilly, Merck, Novartis, Novo Nordisk, Sanofi, UCB, and United Therapeutics.

HRSA so far has referred to OIG just eight of the 11 to which it sent notices: AstraZeneca, Boehringer Ingelheim, Lilly, Merck, Novartis, Novo Nordisk, Sanofi, and United Therapeutics. Six of those referrals—those regarding AstraZeneca, Lilly, Novartis, Novo Nordisk, Sanofi, and United Therapeutics—were dated either Sept. 21 or Sept. 22, 2022. In a week, that will be 19 months ago.

AbbVie, Amgen, and UCB also got 340B program violation notices. Their policies remain in place, but none has been referred to OIG. AbbVie and Amgen were the last of the 11 manufacturers that got program violation letters from HRSA, both on Oct. 17, 2022—almost six months ago. UCB got its letter on June 27, 2022—almost 10 months ago.

The 10 companies with pricing restrictions that haven’t gotten a 340B program violation notice from HRSA are Bausch Health, Bayer, Biogen, Bristol Myers Squibb, Exelixis, EMD Serono, Gilead, GlaxoSmithKline, Johnson & Johnson, and Pfizer. Pfizer’s policy is the oldest of the 10. It announced its original limits on 340B pricing on Jan. 28, 2022—more than 14 months ago.

Why HRSA has not told these 10 companies that their policies are illegal and must stop is not known. It is actively defending the legality of such notices in multiple federal lawsuits. (HRSA has sent 340B program violation notices to 11 companies. Ten have sued to have the notices struck down. AbbVie is the only company out of the 11 that has not yet sued.)

6 Companies Toughen Policies

Six manufacturers have stiffened their conditions on 340B pricing since the federal appeals court decision in January. Johnson & Johnson is one of them.

J&J announced its original conditions on 340B pricing on March 21, 2022, and toughened them on Feb. 16 of this year. HRSA has not sent the company a program violation notice about either its original or updated policy.

According to members of hospital group 340B Health, the association asked HRSA in March to send J&J a 340B program violation notice, on the grounds that one of its updates was contrary to the January appeals court ruling.

GlaxoSmithKline and Pfizer also have tightened their conditions on 340B pricing since the appeals court ruling and also have never gotten a program violation letter from HRSA.

AbbVie, Amgen, and Novartis are the other manufacturers that have toughened their policies since January.

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