Certain Manufacturers Are in Violation of 340B Statute

Thoughtware Alert Published: May 24, 2021
340B Drug Pricing

On May 17, 2021, the Health Resources & Services Administration (HRSA) issued individual letters from HRSA Acting Administrator Diana Espinosa to AstraZeneca, Eli Lilly, Novartis, Novo Nordisk, Sanofi, and United Therapeutics—all manufacturers involved in withholding 340B Drug Pricing Program (340B) pricing to covered entities’ contract pharmacy arrangements. The letters stated the manufacturers are in direct violation of the 340B statute. The letters state that these manufacturers must immediately begin offering 340B pricing to all contract pharmacy arrangements. The letters also indicate that these manufacturers must submit plans to reinstate 340B pricing, including crediting and refunding 340B-covered entities due to these intentional overcharges, by June 1, 2021. Failure to provide the 340B price for contract pharmacies to covered entities may result in civil monetary penalties not to exceed $5,000 for each instance of overcharging.

We recommend covered entities take an active role in reviewing credits and monitoring price changes from each manufacturer involved to help ensure that correct 340B pricing is being honored retrospectively and moving forward. Tracking should include:

  • Reviewing unqualified National Drug Code (NDC) from the six manufacturers as of the date that 340B prices were halted: 
    • AstraZeneca – October 1, 2020
    • Sanofi – October 1, 2020
    • Eli Lilly – September 1, 2020
    • Novo Nordisk – January 1, 2021
    • Novartis – October 1, 2020 (continued to provide 340B discounts to contract pharmacies within 40 miles of the covered entity)
    • United Therapeutics – May 13, 2021
  • Assessing NDCs excluded from your program due to these price halts
  • Assessing your drug catalog prices loaded on each contract pharmacy portal or TPA
  • Assessment of the price differences per quarter to allow for oversight as the credits are paid

Understanding the financial loss caused by manufacturers will help prepare covered entities for next steps to obtain 340B savings. 

For more information on the strategy laid out above or for other 340B questions, reach out to your BKD Trusted Advisor or submit the Contact Us form below.

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