Most Drug Companies Are Doing the Right Thing

By 340B Matters

Sometimes the best course of action is to do nothing. In the case of the 340B Drug Discount Program, the vast majority of pharmaceutical companies have chosen just that.

These manufacturers deserve credit for doing the right thing.

So far, six drug companies have decided to brazenly break the law regarding federally mandated 340B discounts on outpatient medications for safety-net healthcare providers. The dishonor roll: Eli Lilly, Merck, AstraZeneca, Sanofi, Novartis and United Therapeutics. They’ve balked at providing lower-priced meds to hospitals and clinics that use contracted pharmacies to better reach underserved patients.

They have done so in the midst of a global pandemic that has strained our nation’s health care providers like never before. The actions of these drug companies are truly reprehensible and they deserve the moniker “Shameful Six.”

The deplorable move against 340B has drawn the consternation of 278 members of Congress and 20 health associations. The strategy has also been deemed illegal by the Department of Health and Human Services that oversees the program.

“We conclude that to the extent contract pharmacies are acting as agents of a [health provider], a drug manufacturer in the 340B Program is obligated to deliver its covered outpatient drugs to those contract pharmacies and to charge the [provider] no more than the 340B ceiling price for those drugs,” wrote the agency’s top lawyer in a recent advisory opinion.

The facts are simple. A small group of drug companies is undermining a federal program designed to help safety-net healthcare providers better serve the poor. They’re taking a big risk. Participation in the 340B program is a requirement for any manufacturer to sell to the huge Medicare and Medicaid markets. Florida Medicaid has already implied that the Shameful Six could be dropped from the state’s lucrative drug formularies.

Multiply the problem by 49 other state Medicaid programs and the potential financial loss is staggering. Yet the recalcitrant drug makers appear hellbent on ignoring the legal and market warnings and recently challenged the HHS advisory opinion above in court. Clearly the Shameful Six have no problem spending big bucks on lawyers while they short first responders in the midst of a crushing national health crisis.

The Shameful Six are a reckless cabal that the rest of the industry doesn’t seem eager to join. That’s not only smart but shows most drug manufacturers are committed to following the law and seeking redress through appropriate agency processes. We commend the balance of the drug industry for staying on the right side of history and not degrading itself by joining the Shameful Six.