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NACHC told HHS Secretary Becerra it has “little choice” but to turn to Congress after an HHS panel dismissed NACHC’s 340B overcharging claims against AstraZeneca and Sanofi.

NACHC Seeks Meeting with Becerra About 340B Contract Pharmacy Restrictions After “Inexplicable” ADR Decision

The National Association of Community Health Centers is asking to meet with U.S. Health and Human Services Secretary Xavier Becerra to discuss drug companies’ “unlawful restrictions” on 340B drug shipments to contract pharmacies.

NACHC told Becerra in an Oct. 14 letter it has “little choice” but to ask Congress to intervene after an HHS 340B administrative dispute resolution panel dismissed NACHC’s overcharging claims against AstraZeneca and Sanofi. NACHC Interim President and CEO Rachel Gonzales-Hanson told Becerra the dismissal was “inexplicable” and said it “deprived health centers of due process mandated by Congress.”

“We have followed the rules that Congress authorized and the department implemented but continue to be in an untenable situation where health centers and their patients are hurting,” she said.

Gonzales-Hanson reminded Becerra that at a NACHC event in February he said HHS was “going to continue to fight” manufacturer restrictions on 340B contract pharmacy because “it’s the law” and he asked health centers to “help us win that battle.”

“It is noteworthy that since you made those remarks four additional manufacturers have placed restrictions on shipments to health center contract pharmacies, and the Department of Health and Human Services Office of Inspector General declined to take any enforcement action against drug manufacturers,” she said. Bausch Health in July became the 18th manufacturer to announce restrictions on 340B contract pharmacy. Eight companies’ policies apply to health centers.

Late last month, 340B Report broke the news that OIG told members of Congress it does not plan to penalize manufacturers for their 340B contract pharmacy restrictions at this time. The office told lawmakers it wants to see how federal appeals courts rule on whether manufacturers must honor 340B contract pharmacy arrangements. Oral arguments in Novartis and United Therapeutics’ consolidated cases are scheduled for this Monday, Oct. 24; in Lilly’s lawsuit the following Monday, Oct. 31; and in Sanofi, Novo Nordisk, and Astra Zeneca’s lawsuits on Tuesday, Nov. 15.

Gonzales-Hanson told Becerra, “I understand that you have called on Congress to provide the department with additional regulatory authority and funding to administer the 340B program.”

“The ADR panel’s dismissal of our claim, declining to use clear authority that Congress has already granted to HRSA, leaves us with little choice but to go to Congress,” she said. “I hope we can count on you and the department to play an active role in driving a meaningful solution for health centers that prioritizes stability for safety-net providers.”

At a June news conference, NACHC Senior Vice President Joe Dunn and local health center leaders expressed support for bills to stop drug makers from restricting 340B contract pharmacy arrangements and stop pharmacy benefit managers from taking covered entities’ 340B savings.

340B Report reported late last week that Advocates for Community Health—a newer, smaller national health center association—wants Congress to create a separate drug discount program called 340C for health centers and possibly rural hospitals and grantee covered entities.

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