The Calm Before the 340B Storm?

A message from 340B Report Publisher and CEO Ted Slafsky: We are pleased to have a sponsored content piece today by Equiscript CEO Michael Burkhold. I encourage you to read it. We will have more information about 340B Report sponsorship packages for 2021 in a few weeks. In the meantime, if you have questions, reach me at

The Calm Before the 340B Storm?

This Thursday, Oct. 1, drug manufacturer Sanofi and potentially AstraZeneca could begin to impose unilateral limits on 340B contract pharmacies, one month after Eli Lilly and Co. reduced its 340B pricing for contract pharmacies to a trickle and imposed strict conditions on 340B charges and reimbursement for Lilly insulin. The U.S. Health and Human Services Department (HHS) strongly rebuked Lilly in a letter last week but did not stop it. HHS said the U.S. Health Resources and Services Administration (HRSA) “is still evaluating how to proceed” but that it may impose sanctions on drug manufacturers who refuse to offer 340B pricing at contract pharmacies. HHS also appeared to suggest that Lilly risked being sued under the False Claims Act.

Drug manufacturer Novartis originally also planned to impose limits on Oct. 1, but now says it is evaluating its next steps. Drug manufacturer Merck likewise said last week it is weighing its options.

Other unnamed drug companies are working with a contractor, Kalderos, to provide 340B ceiling prices as rebates instead of as discounts.

Congressional Democrats and Republicans have asked AstraZeneca, Lilly, Merck, Novartis, and Sanofi to back down. A new letter from five U.S. House Republicans to the companies has just come to light (see story below). The chair of the House committee with primary jurisdiction over 340B met yesterday with community health centers about the situation and tweeted about his displeasure with the companies (see story below). He and hundreds of other lawmakers have asked the U.S. Health and Human Services Department (HHS) to stop the companies. The head of Novartis’ U.S. operations is scheduled to testify before a House committee Thursday about his company’s drug prices. Novartis’ recent 340B actions could come up.

If AstraZeneca, Sanofi, and other manufacturers stop providing or impose conditions on 340B pricing on drugs dispensed by contract pharmacies on Thursday, all eyes will be on U.S. Health Resources and Services Administration (HRSA).

If HRSA or HHS do not block the companies, covered entities are expected to sue the government, possibly within days. If HRSA or HHS try to stop the companies, the drug industry might sue them for over-reaching their authority.

340B Report is following these and other 340B program developments closely and will keep you informed.

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Manufacturer Changes to 340B Are Leaving Uninsured Patients Out in the Cold

LilaRx Can Help Fill the Gap

Recent actions by drug manufacturers are dramatically limiting patients’ access to lifesaving, low-cost 340B drugs.

Established channels for accessing discounted medications via contract pharmacies have been dismantled almost overnight with little regard to patients and safety net providers that rely on inexpensive 340B medications in order to serve their patients.

Covered entities are now in what appears to be an impossible spot at just the wrong time. Nonetheless, more drug manufacturers look to be piling on with ill-conceived restrictive policies that will immediately hurt poor, disenfranchised Americans already suffering through an unprecedented economic downturn.

How can a covered entity serve their entire uninsured patient base with only a few pharmacies?

Equiscript has a solution. LilaRx is the most comprehensive, easy to use 340B-based nationwide medication assistance program designed specifically to pass 340B savings to uninsured and low-income patients. It is a streamlined way for providers to get lifesaving medications into the hands of some of their most at-risk patients regardless of how far they live from a pharmacy.

LilaRx utilizes the national reach of our home-delivery pharmacy partners like Truepill to send patients their medication right to their homes, eliminating common barriers like lack of access to transportation.

LilaRx also acts as a bookkeeper. Covered entities can access the data they need to show exactly how the 340B program assists their most vulnerable patients and how their program is directly helping folks in their community gain access to affordable medications.

The 340B program is a critical tool for healthcare providers and must be preserved to continue providing necessary care to vulnerable populations. Watch our video to see if you think we can help your patients.

Click here for a video about LilaRx

For questions or more information, please contact or visit

Five U.S. House Republicans Ask Drug Companies to Back Down on 340B

Arkansas’s entire U.S. House delegation—four representatives, all Republicans—plus a South Carolina Republican on the House Oversight and Government Reform Committee have urged the five drug manufacturers limiting 340B pricing on drugs dispensed by contract pharmacies “to reconsider your upcoming deadlines.”

Arkansas Republicans Bruce Westerman, Steve Womack, French Hill, and Rick Crawford and South Carolina Republican Ralph Norman wrote to the chief executives of Eli Lilly and Co., Merck, Sanofi, Novartis, and AstraZeneca on Sept. 18. It was the latest in a cascade of letters this month from members of Congress to the five companies, Pharmaceutical Research and Manufacturers of America, and federal health officials raising concerns about the manufacturers’ actions.

The representatives told the companies that limiting how many contract pharmacies covered entities can have “is not consistent with the 340B program’s intent and would put patients in jeopardy.” They said they understand and appreciate manufacturers’ concerns about unlawful duplicate discounts. But, they said, “340B stakeholders and Congress must play a role to understand the downstream implications of these actions and introduce legislative reforms to the program to ensure it continues to serve those most in need.”

The lawmakers said limiting the number of contract pharmacies 340B entities can have could cause entities to open to open their own pharmacies. That could cause existing community pharmacies to close, limit patient choice, “and open the door for discriminatory contracting” by pharmacy benefit managers.

“A major change to this program should include a collaborative comment period with 340B stakeholders in conjunction with the government agencies whose responsibility it is to oversee the 340B program,” the lawmakers wrote. “The deadlines you have imposed are counterproductive to the intent of the program and are contrary to regulatory guidance and longstanding practice. The changes will financially harm both 340B entities and the millions of patients that depend upon them for health care services and access to discounted medications.”

LaShannon Spencer, CEO of Community Health Centers of Arkansas, which represents the state’s health centers, said CHCA and other Arkansas 340B stakeholders were “in constant contact” with their congressional delegation to update them about health center operations and their relationship to 340B. “Your opinion and your voice does matter with them,” Spencer said. “340B impacts more than CHCs,” she said, “so I knew it was important to develop a coalition. As a result, we held conference calls with hospitals leaderships, including at Piggott, White River, Ashley County Medical Center, and Harrison hospitals.”

“Many of the patients that seek medical care within the walls of a CHC would not have access to critical medication without 340B,” Spencer said. “The 340B program is essential for low-income Arkansans to gain access to necessary prescriptions, to live a high quality of life, and in some cases, simply survive.”

Lelan Stice, an Arkansas independent community pharmacy owner and long-time 340B provider advocate, likewise said getting all four the state’s U.S. representatives to sign the letter was due to “a grassroots approach” that included hospitals, hospital and pharmacy associations, independent pharmacy owners, “and messaging on Facebook to patients/followers of independent pharmacies to contact their representatives.”

“Care for the poorest of the poor is at stake here as discounted insulin will no longer be available unless the hospital can afford to pay 100 percent of the cost for thousands of patients,” Stice said. Federally qualified health centers “will be forced select one community pharmacy over another in rural communities, causing strife and reducing patient choice.”

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House Energy & Commerce Chair and Health Centers Meet About Pharma and PBM 340B Actions

U.S. House Energy & Commerce (E&C) Chair Frank Pallone (D-N.J.) tweeted yesterday that “care for many is at risk” after listening to community health centers’ concerns about drug manufacturers’ and pharmacy benefit managers’ recent 340B actions.

“Good discussion today with @NACHC,” Pallone wrote after a Sept. 28 morning video call with National Association of Community Health Centers executives and members. “We must protect all patients from drug manufacturers that are denying drug discounts required under the 340B program.”

NACHC Senior Policy Adviser Colleen Meiman said health centers in Pallone’s home district arranged the call. NACHC expressed concerns about drug manufacturers’ moves to limit 340B contract pharmacy and provide 340B pricing as rebates instead of as discounts, and PBMs reimbursement reductions for 340B purchased drugs, she said.

Early this month, Pallone and the chairs of the E&C health and oversight subcommittees told U.S. Health and Human Services (HHS) Secretary Alex Azar in a letter that drug manufacturers should not be allowed to “pick and choose” which 340B program requirements to comply with and which to ignore.

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Stopgap Federal Funding Bill Affects 340B Pricing on Medication Assisted Drug Addiction Treatment

The U.S. Senate is scheduled to vote later today on House-passed legislation to continue federal funding for government departments and agencies at current levels for 10 weeks. The new federal fiscal year begins Oct. 1. Congress has not passed and sent to the president any of its 12 regular appropriations bills.

The so-called continuing resolution includes language clarifying that buprenorphine and other medicines used in medication-assisted treatment for opioid addiction are covered outpatient drugs for Medicaid drug rebate program (MDRP) purposes. A 2019 federal law that takes effect Oct. 1 inadvertently carved out drugs used in opioid addiction treatment from MDRP. Because the 340B program and MDRP define the term covered outpatient drug alike, those drugs also would have been walled off from 340B drug ceiling prices.

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340B Pricing Unlikely on Drugs Imported from Canada

Prescription drugs imported from Canada under new federal regulations and guidance likely will not be subject to 340B ceiling price requirements, the U.S. Health Resources and Services Administration (HRSA) indicated to 340B Report yesterday.

In late July, President Trump signed an executive order directing the U.S. Health and Human Services Department (HHS) to publish a final rule to let states import lower cost drugs from Canada. The U.S. Food and Drug Administration (FDA) released the rule on Sept. 25 and it will be formally published on Oct. 1. The U.S. Centers for Medicare & Medicaid Services issued guidance to state Medicaid agencies on Sept. 25 on how the new FDA rule will affect Medicaid drug rebate calculations.

CMS said drugs imported under the rule “would not meet the definition of a covered outpatient drug” for Medicaid drug rebate program purposes. The U.S. Health Resources and Services Administration (HRSA), in a January 2017 340B program final rule, said the term “covered outpatient drug” for 340B purposes is defined the same as for Medicaid drug rebates.

We asked HRSA what CMS’ decision that imported drugs are not covered outpatient drugs for Medicaid drug rebate purposes means for the 340B program.

“To the extent it is determined that a drug does not meet the definition of a covered outpatient drug, those drugs would not be available at the 340B price,” HRSA said.

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