Organon today became the 22nd drug maker to announce conditions on 340B pricing involving drug shipments to contract pharmacies. They apply to hospitals only, grantee covered entities are exempt.

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Organon Is the 22nd Drug Maker to Impose Limits on 340B Contract Pharmacy

Drug manufacturer Organon, the Merck spinoff with a focus on women’s health, today became the 22nd drug maker to impose conditions on 340B pricing involving delivery to contract pharmacies.

Covered entities began receiving an email from Organon around 3:00 p.m. Eastern announcing the policy. It applies to hospital 340B entities only, grantees are exempt.

According to the June 1 letter, starting July 1 “Organon will only provide products purchased at the 340B price to locations registered as 340B covered entities and will decline to facilitate Bill To/ Ship To orders for all hospital covered entities.”

June 16 Deadline for Action

“Any hospital covered entity, regardless of whether it has an in-house pharmacy capable of dispensing 340B purchased drugs to its patients, may designate a single contract pharmacy location if the covered entity provides claims data for the designated single contract pharmacy through 340B ESP,” the letter said. “Covered entities must take action by June 16th, 2023, in order for contract pharmacy location designations to take effect on the effective date of this policy.”

According to an accompanying FAQ, there is no exception for hospitals’ wholly owned contract pharmacies. A hospital may designate a wholly owned contract pharmacy as the single contract pharmacy that Organon allows “so long as it complies with the claim submission requirements.”

Contract pharmacy replenishment orders for hospital covered entities registered with 340B ESP will be honored for prescriptions dispensed to eligible 340B patients within forty-five (45) days of each data submission to 340B ESP,” the FAQ said.

Earlier today, Novo Nordisk announced that effective July 1 it will stop letting hospitals place bill to / ship to orders of 340B-purchased drugs to an unlimited number of contract pharmacies in exchange for related claims data.

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