A screenshot of drug industry vendor Kalderos' email announcement this week that 340B Pay, its service to let drug companies pay 340B ceiling prices as rebates instead of as discounts, is operational.

Kalderos Tells Hospitals its Service to Turn 340B Discounts into Rebates is Operational

Drug discount management company Kalderos sent email messages to 340B hospitals this week once again announcing the launch of its 340B Pay service to let drug companies pay 340B ceiling prices as back-end rebates instead of as front-end discounts on drugs dispensed at contract pharmacies. The launch previously was scrubbed a handful of times.

Kalderos says 340B Pay will eliminate the risk of duplicate discounts and give manufacturers a way to address concerns about drug diversion. It released a report this week that found that its 340B rebate model improves covered entity cash flow relative to existing contract pharmacy replenishment models.

Groups representing 340B covered entities say converting 340B drug discounts into drug rebates violates the 340B statute, subverts congressional intent, and threatens entities’ access to 340B savings. The U.S. Senate Appropriations Committee last month expressed concern “that drug manufacturers may adopt a rebate model that could limit covered entity access to 340B pricing.” In November 2020 a bipartisan group of 217 U.S. House members urged HHS to clarify that manufacturers cannot implement a 340B rebate model without the department’s say-so.

Kalderos sued the U.S. Health and Human Services Department (HHS) and Health Resources and Services Administration (HRSA) last month. It said it communicated unsuccessfully with them over 20 times over two and a half years seeking an assurance that 340B Pay was permissible. Its suit seeks to vacate and set aside HRSA’s findings that several drug manufacturers’ denials of 340B pricing when entities use contract pharmacy violate the 340B statute. Kalderos also wants the court to declare that manufacturers may require covered entities seeking 340B pricing to provide claims information needed to prevent duplicate discounts and diversion.

Hospital 340B program managers reported getting an email message from Kalderos on Monday, Nov. 1. The message said Kalderos sent a separate email to the hospital senior executive responsible for the hospital’s 340B participation and compliance with instructions on how to set up an account with Kalderos and start using a tool called Request to ask for 340B pricing on drugs dispensed at contract pharmacies.

“After placing the 340B eligible prescription transaction into Request, manufacturers will then review and pay 340B discounts through a third-party payment partner directly to your covered entity,” the email to the hospital 340B program managers said. The message links to a Kalderos fact sheet and blog post about 340B Pay.

Questions About Clovis Oncology

Meanwhile, some 340B stakeholders say they were told this week that Colorado-based manufacturer Clovis Oncology would start using 340B Pay on Dec. 1 to provide 340B pricing as rebates on its oral ovarian cancer medicine Rubraca when it is dispensed by contract pharmacies. Other 340B stakeholders said they were told that a second drug manufacturer would soon begin using 340B Pay in conjunction with a new product launch.

HRSA said yesterday it cannot provide any information or comment on reports that Clovis sent it a letter regarding provision of 340B ceiling pricing as a rebate rather than as a discount. A Kalderos company spokesperson said last Friday that it had not sent a letter to HRSA regarding a manufacturer that wishes to begin using 340B Pay.

Kalderos has not responded to a Nov. 2 request for comment about whether Clovis will start requiring use of 340B Pay on Dec. 1. A Clovis spokesperson said on Nov. 2 she had no knowledge about Clovis contracting with Kalderos to use 340B Pay and would check with company executives.

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