Lilly Moves to Undermine 340B Again

Eli Lilly and Company has made good sport of undermining the 340B Drug Discount Program and is once again bullying safety-net hospitals – this time with unworkable and burdensome administrative demands. 

On January 15, Lilly gave notice that providers will have to supply claims level data for all pharmacy and medical dispensations of its products in order to receive government-mandated 340B pricing. First, who put Lilly in charge of making rules for this federal program? And what does that imply about the oversight capabilities of the Health Resources and Services Agency? The company’s arrogance is stunning.

Lilly contends that claims level data is “standard information,” and therefore shouldn’t be a problem for hospitals. Well, that’s rich! Demanding such data has only become “standard” since the drug company started twisting the arms of contract pharmacies in 2020. The reality: Providing this data is not normal and would be enormously expensive and time consuming for 340B hospitals. 

Lilly says it needs the information to thwart duplicate discounts – when a drug receives both a 340B reduction and a Medicaid rebate. If so, it’s a solution in search of a problem. Big Pharma prattles on regularly about the supposed bogeyman of duplicate discounts without providing actual proof that it's a pervasive problem. Further, the shotgun data request is for all prescriptions, not just Medicaid, which begs the question of why it’s necessary. 

The company also asserts it needs such information to initiate audit requests. Really? Lilly and the rest of Big Pharma have been demanding – and receiving—audits of 340B hospitals for more than three decades. All they ever have to do is ask HRSA. 

So what’s really going on? Lilly is trying to achieve 340B death by a thousand paper cuts. It’s a classic gambit of throwing sand in the gears in the hopes of breaking the machine. Why? So the company can make fatter profits. And Lilly tends to lead the herd, as other manufacturers will surely jump on this unreasonable new data requirement just as they followed suit on contract pharmacy restrictions. 

The world needs to remember that Big Pharma makes money on the 340B program! Even at the required discount of 25 to 50 percent, drug companies make a profit selling to 340B healthcare providers.  The real driver is good, old-fashioned greed.