HHS Inspector General Must Find Drug Companies GUILTY

By 340B Matters

The Department of Health and Human Services has referred six recalcitrant drug companies to the agency Inspector General for civil monetary penalties for denying 340B discounts to healthcare safety-net providers.

There’s no question these six drug companies are guilty, guilty, guilty.

We applaud the Health Resources and Services Agency for holding AstraZeneca, Eli Lily, Sanofi, Novartis, Novo Nordisk and United Therapeutics accountable for their blatantly illegal actions. Each company received a notification letter on September 22 from Michelle Herzog, acting director of the office of pharmacy affairs.

The cabal of six huge manufacturers has refused to provide legally required discounts to 340B providers that rely on community pharmacies to get medications closer to their patients. The Inspector General will review the situation in order to answer a simple question: Did the companies “knowingly and intentionally” stop providing the lower 340B price for outpatient drugs to these hospitals and clinics?

Yes, yes, and more yes.

There’s simply no other conclusion that can be reasonably reached. On May 18, 2020, Eli Lilly notified Office of Pharmacy Affairs Director Rear Admiral Krista Pedley “… effective July 1 we are instructing wholesalers to discontinue our practice of voluntarily honoring requests of 340B ‘contract pharmacies’ for orders of certain [medications].”

How much more knowing and intentional could Lily possibly be? Since then, the other drug companies have followed suit with their own letters denying 340B discounts on a wide range of drugs. The negative impact on safety-net providers has been deep and ongoing. HHS estimates that these hospitals and clinics, who also serve as America’s health care first responders, lost $3.2 billion over the last year.

Given these facts, the HHS inspector general can only conclude the companies purposefully violated the 340B statute and implement civil monetary penalties.

The sooner the OIG reaches this inescapable conclusion, the better off America’s health care providers will be.

The decision can’t come soon enough.