Letter to the Hon. Alex M. Azar, Secretary, U.S. Department of Health and Human Services - Sen. Moran Joins Bipartisan Effort Urging Hhs to Address Pharmaceutical Companies Undermining 340 B Program

Letter

Dear Secretary Azar:
We write to express our concerns regarding recent actions from pharmaceutical manufacturers
that threaten to undermine the role of contract pharmacies in the 340B Drug Pricing Program. In
the midst of the ongoing COVID-19 pandemic, where providers have seen drops in revenue and
available resources, it is critically important that 340B covered entities, including federally
qualified health centers (FQHCs), FQHC Look-Alikes, children's hospitals, Ryan White
HIV/AIDS clinics, and other safety-net hospitals and providers are able to continue to serve the
individuals who seek out their care. As these threats to the Program progress, we fear the
potential exacerbation of these shortfalls in resources for providers at a time when they are
needed most. While we understand that the Health Resources and Services Administration
(HRSA) is further investigating these actions, we urge HRSA to take immediate and appropriate
enforcement action to halt these tactics and ensure safety-net providers are able to continue
providing life-saving medications to patients across the country.
As you are aware, on September 1, 2020, Eli Lilly announced that the company would no longer
allow 340B covered entities to receive discounts for products that are shipped to a contract
pharmacy, with an exception for insulin. This follows similar actions from AstraZeneca, which
announced in August that it would refuse 340B pricing to hospitals with on-site pharmacies for
any drugs dispensed through contract pharmacies. Similarly, other companies have imposed
additional and burdensome reporting requirements on all contract pharmacy claims. For covered
entities, and in particular rural hospitals and other rural covered entities that rely
disproportionately on contract pharmacies, these changes could have long-lasting repercussions
that will challenge a covered entity's ability to support its community now during this pandemic
and in the future.
The Public Health Service Act requires that manufacturers wishing to participate in Medicaid
and Medicare Part B enter into agreements with the Department of Health and Human Services
(HHS) that "require that the manufacturer offer each covered entity covered outpatient drugs for
purchase at or below the applicable ceiling price if such drug is made available to any other
purchaser at any price." Further, HRSA has recognized the importance of contract pharmacies by
acknowledging such arrangements in current guidance. We believe these recent actions by
pharmaceutical manufacturers run counter to the statute and create a dangerous and negative
precedent for the 340B Program and the providers and patients it serves.
To ensure pharmaceutical manufacturers continue to comply with the 340B statute and provide
discounts to safety-net providers, we call on HRSA to take appropriate, prompt enforcement
action to address violations of the Public Health Service Act. We appreciate your attention to this
important issue and look forward to partnering with you and stakeholders to ensure the 340B
program continues to support access to quality health services with proper oversight and
transparency.
Sincerely,