WASHINGTON (September 7, 2020) AIDS Healthcare Foundation (AHF) condemns the latest series of attempts by drug manufacturers to undermine an essential part of the healthcare safety net, the 340B Drug Pricing Program.
“Make no mistake, the 340B Program is under attack,” said Tracy Jones, AHF senior manager and executive director of the AIDS Task Force of Greater Cleveland, an AHF affiliate. “At a time when safety net providers around the country are struggling to keep their doors open and serve patients in the midst of a pandemic, drug companies are devising new ways to make the costs of drugs more expensive, and to cut safety net providers off from the savings they need to support their services.”
The 340B Program gives certain safety net providers also known as covered entities the right to purchase drugs at discounted prices. These providers include federally qualified health centers (FQHCs), Ryan White HIV treatment clinics, hemophilia treatment clinics, and certain hospitals. They use their savings to stretch scarce federal dollars to provide more services.
First, drug manufacturers Eli Lilly and AstraZeneca threatened to refuse to provide the statutory 340B discount price to safety net providers that use contract pharmacies. Many providers depend on these pharmacies because they don’t have in-house pharmacies. And using contract pharmacies allows safety net providers to reach more patients and provide more access to care. The federal agency in charge of the 340B Program – HRSA (Health Resources and Services Administration) – specifically approved the use of contract pharmacies by covered entities a decade ago.
Second, drug manufacturers Merck, Novartis and Sanofi are threatening to refuse to provide the 340B discount unless safety net providers turn over sensitive claims data about the providers’ individual patients. HRSA prohibited drug companies from putting conditions on their offer of statutory discounts back in 1994 – at the beginning of the program – and for good reason. “HRSA didn’t want the fox guarding the henhouse,” said Scott Carruthers, chief of pharmacy and senior manager for AHF.
Finally, drug companies are trying to convert the program from a discount program into a rebate program. “The same industry that enjoys record profits every quarter, now wants safety net providers to float them. Rather than paying the 340B discount to safety net providers up front, they want to hold the money in their pockets longer and, in their sole discretion, decide whether and when to give the covered entity the 340B price,” added Carruthers.
“All these unprecedented moves by drug manufacturers are a brazen attempt to take advantage of chaotic times – a pandemic and civil unrest. AHF is pleased that members of the Energy and Commerce Committee of the U.S. House of Representatives have demanded that U.S. Health and Human Services Secretary Alex Azar stop drug companies’ designs to undermine 340B (Committee letter). We are also glad that HRSA has announced it will consider whether manufacturer’s policies including Lilly’s, violate the 340B statute and whether sanctions apply,’’ said Carruthers.
“It’s no secret that drug companies don’t like the 340B program, because providing discounts to safety net providers eats into their profits. But the program represents only a sliver to the total value of the sales revenues this industry rakes in – revenue that is largely subsidized by the U.S. taxpayers in the Medicare and Medicaid programs. In the current chaotic climate, drug companies perceive the henhouse as unguarded, and so they are moving in like the fox to pretend to guard it. They aren’t interested in guarding it. They are interested in dismantling it. Shame on the drug companies. Hands off 340B. Let 340 be,” concluded Jones.
For more information on 340B and the ‘Let340B program, please visit: www.let340b.org
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