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Health Centers Are Preparing to Sue Over Drug Makers' 340B Actions

Monday, September 14, 2020   (0 Comments)
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Written by Tom Migra, Editor, 340B Report.


Reprinted with permission from 340B Report. Original article published here on Wednesday September 9, 2020.


The National Association of Community Health Centers (NACHC) “is preparing legal action” in response to drug manufacturers’ recent unilateral moves to stop providing reduced 340B pricing on their products or start imposing conditions on health centers and others that qualify for 340B drug discounts, the group says.

NACHC disclosed the work on the potential lawsuit in a statement issued late on Sept. 4. Other 340B providers and organizations are considering lawsuits, 340B Report has learned. Inside Health Policy first reported about NACHC’s legal preparations last night.

A lawsuit would be a major but not unexpected escalation in the current fight between drug manufacturers and covered entities over the companies’ 340B program obligations and prerogatives. “Let me be clear—community health centers cannot and will not stand by while manufacturers and for-profit third parties line their own pockets at the expense of people affected by COVID-19 and the providers who serve them on the frontlines,” NACHC President and CEO Tom Van Coverden said in the statement. “Countless lives are at stake.”

Van Coverden alluded to manufacturers Eli Lilly and AstraZeneca’s decisions to cease providing 340B pricing on products shipped to nearly all contract pharmacies; Lilly’s decision to impose conditions on the prices 340B covered entity patients pay and what insurers are billed for Lilly’s insulin products; manufacturers Merck, Sanofi, and Novartis’ decisions to ask or require covered entities to hand over 340B contract pharmacy claims data to a third party or risk losing 340B pricing at contract pharmacies; and anticipated decisions by some manufacturers to provide 340B pricing in the form of rebates, not discounts.

“Manufacturers have chosen…to pick and choose which 340B requirements to follow, and to impose new requirements on health centers in order to save themselves money,” Van Coverden said. “Unless Congress and [the U.S. Health Resources and Services Administration] HRSA take immediate and strong action, the 340B program may collapse and tens of millions of Americans will see their prescription drug prices skyrocket. For many, especially during a time like this, lack of access to vital medications could very well result in death.”

On the legislative front, Van Coverden referred to the Sept. 3 letter from three U.S. House Energy & Commerce (E&C) Committee Democratic leaders to U.S. Health and Human Services (HHS) Secretary Alex Azar warning that letting manufacturers “pick and choose” which 340B program requirements they will comply with “could set us on a treacherous path.”

“Several ‘Dear Colleague’ letters addressed to [Pharmaceutical Research and Manufacturers of America] PhRMA and HHS are currently circulating on Capitol Hill,” he said. “But much more must be done to protect the health and lives of our 30 million patients.”

Last Friday, U.S. Sen. Richard Blumenthal (D-Conn.) criticized the recent spate of 340B actions by drug manufacturers during an event with state lawmakers at a Middletown, Conn., health center. A local newspaper covered Blumenthal’s remarks.

“What is happening here is one more instance of Big Pharma trying to profiteer at the expense of our most vulnerable people,” said Blumenthal. “Why are they breaking the law to block needy people from having the drugs they need?” Blumenthal asked. “To make more money. It’s that simple. These drugs are not a luxury or convenience. They are life-saving.”




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