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By 340B Matters
Dear Secretary Becerra,
On August 1 and September 1, Boehringer Ingelheim and Merck respectively began denying 340B discount pricing to safety-net healthcare providers that use contract pharmacies. This is in direct contravention of federal law. It’s part of an ongoing assault by the pharmaceutical industry on a program that has helped hospitals and clinics care for America’s underserved patients for almost 30 years.
There are now eight drug companies illegally undermining the program and we urge swift action from you. Eli Lilly, Novo Nordisk, Sanofi, Novartis, AstraZeneca, United Therapeutics, Merck and Boehringer should be assessed civil monetary penalties for their behavior. This recourse is part of the 340B statute and it is beyond time for them to pay the price for their arrogant noncompliance. United Therapeutics plans to begin its discount denials on December 1.
Several of the companies have tried unsuccessfully to force providers into supplying claims data under the ruse of tracking “duplicate discounts.” There is already a system in place within the Health Resources and Services Agency for adjudicating these occasional accounting errors. The demand is nothing more than an effort by the drug industry to mire hospitals and clinics in unnecessary paperwork. Further, the 340B law allows no conditions to be placed by drug manufacturers on 340B discounts.
Secretary Becerra, we know you share our concern. On May 17, acting HRSA Administrator Diana Espinosa sent letters to the errant manufacturers warning they had violated the 340B statute by overcharging healthcare providers. They were given until June 1 to comply with the law. None have done so.
The COVID pandemic has put non-profit hospitals under extreme financial pressure. Your agency estimates safety-net hospitals and clinics have lost $2.3 billion in 340B discounts over the last year. Merck alone enjoyed net profits of $7 billion in 2020. Meanwhile, the vast majority of drug manufacturers continue to comply with the 340B law.
The Egregious Eight must feel the full effect of your words to the Senate Subcommittee on Labor and HHS on June 9 when you said: “You violate the law, you pay the consequences.”