365 Days of No Penalties for Scofflaw Drug Companies
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21 Sep 365 Days of No Penalties for Scofflaw Drug Companies

By 340B Matters

It’s 365 days and counting since the Department of Health and Human Services referred scofflaw drug companies to the Office of Inspector General for assessment of civil monetary penalties for violating the 340B Drug Discount Program. It’s an anniversary that none of America’s healthcare safety-net providers wanted to see.

Profit-rich pharmaceutical companies are doubtless cheering the Biden/Harris administration’s inaction.

There is no question the law has been broken. Novartis, Novo Nodisk, Sanofi, United Therapeutics, Eli Lilly and Astra Zeneca were the first companies to refuse to provide discounted medicines to safety-net hospitals that contract with local pharmacies to dispense them.

They each received a letter on September 22, 2021 notifying them of a referral to the OIG. The 340B statute requires drug manufacturers to provide the discounts, period. They cannot pick and choose. The law is also clear that HHS has the power to levy civil penalties for the overcharges – up to $5,000 per incident.

And yet here we are a year later and the OIG remains silent.

But it gets worse. It’s now evident that HHS Secretary Xavier Becerra has little intention of forcing the issue. In a recent letter to Rep. Abigail Spanberger (D-VA), he said his agency needs more authority over the program that can only be granted by Congress: “Legislative action is needed to strengthen the tools that the agency has to ensure the accountability and oversight that we all believe is necessary here.”

That’s balderdash.

HHS already has the legal mandate to fine the errant manufacturers.

The overcharges are doing daily damage to thousands of healthcare providers that open their doors to all patients – even those that can’t afford to pay. Currently, safety-net hospitals are losing a median of $2 million a year on illegally overpriced 340B medicines. America’s rural Critical Access Hospitals are particularly pressed. Since 2010, 139 have closed and more are cutting back on emergency services due to budget shortfalls.

Secretary Becerra, you can hold these giant drug companies accountable today. Prove your support of America’s safety-net hospitals and clinics by levying civil monetary penalties. You can’t Build Back Better if our nation’s neediest health care providers get quietly snuffed out by your inaction.



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