HHS Secretary Alex Azar (AP Images)

At­tor­neys gen­er­al ask HHS to pun­ish 340B pro­gram bilk­ers — but phar­ma claims it's fight­ing 'waste and abuse'

Imag­ined as a ben­e­fit for low-in­come pa­tients, the gov­ern­ment’s 340B scheme re­quires par­tic­i­pat­ing drug­mak­ers to sell their drugs at sig­nif­i­cant dis­counts to play ball in Medicare and Med­ic­aid. But some phar­mas are now loud­ly re­fus­ing to fol­low the rules af­ter cit­ing “waste and abuse” — and state pros­e­cu­tors are de­mand­ing an in­ter­ven­tion.

In a Mon­day let­ter to HHS Sec­re­tary Alex Azar, a group of at­tor­neys gen­er­al from 28 states and the Dis­trict of Co­lum­bia called on the agency to im­pose civ­il penal­ties on a group of Big Phar­ma play­ers it claims have ei­ther stopped or plan to stop hon­or­ing dis­counts un­der the gov­ern­ment’s 340B pro­gram.

The 340B pro­gram re­quires drug­mak­ers that choose to par­tic­i­pate in Medicare Part B and Med­ic­aid to of­fer ne­go­ti­at­ed dis­counts for out­pa­tient drugs to “cov­ered en­ti­ties,” which in­clude six dif­fer­ent hos­pi­tal types: dis­pro­por­tion­ate share hos­pi­tals, chil­dren’s hos­pi­tals and can­cer hos­pi­tals ex­empt from the Medicare prospec­tive pay­ment sys­tem, sole com­mu­ni­ty hos­pi­tals, rur­al re­fer­ral cen­ters, and crit­i­cal ac­cess hos­pi­tals.

The at­tor­neys gen­er­al tar­get­ed six drug­mak­ers in their let­ter — As­traZeneca, Sanofi, Eli Lil­ly, Mer­ck, No­var­tis and Unit­ed Ther­a­peu­tics — for fail­ing to meet their end of the agree­ment and asked HHS to im­pose civ­il fines and lean on its new “ad­ju­di­cat­ed dis­pute res­o­lu­tion” frame­work to en­cour­age 340B hos­pi­tals to hound drug­mak­ers who don’t par­tic­i­pate.

“Each day that drug man­u­fac­tur­ers vi­o­late their statu­to­ry oblig­a­tions, vul­ner­a­ble pa­tients and their health­care cen­ters are de­prived of the es­sen­tial health­care re­sources that Con­gress in­tend­ed to pro­vide,” the AGs wrote. “Drug man­u­fac­tur­ers are, with­out jus­ti­fi­ca­tion, flout­ing dis­count­ed pric­ing re­quire­ments for low-in­come pa­tients and/or un­rea­son­ably con­di­tion­ing 340B pric­ing on da­ta de­mands, de­priv­ing such pa­tients of af­ford­able med­ica­tions to the detri­ment of the health cen­ters and hos­pi­tals that serve these vul­ner­a­ble com­mu­ni­ties.”

But Big Phar­ma — un­sur­pris­ing­ly — doesn’t see it­self as a bad ac­tor and claims it’s fight­ing “waste and abuse” in the pro­gram. Even more, one drug­mak­er said, it isn’t threat­en­ing to cut 340B pric­ing for hos­pi­tals that play along.

Take Sanofi, for in­stance: The French drug­mak­er on Oct. 1 kick­start­ed an ini­tia­tive re­quir­ing 340B hos­pi­tals to for­ward “de-iden­ti­fied” pa­tient claims da­ta to de­ter­mine whether there had been “du­pli­cate dis­counts,” in which those com­pa­nies are of­fer­ing both 340B-priced drugs and pay­ing re­bates to Med­ic­aid. Sanofi claimed 30% of Health Re­sources and Ser­vices Ad­min­is­tra­tion (HRSA) au­dits in 2018-19 found du­pli­cat­ed dis­counts at 340B hos­pi­tals.

If 340B hos­pi­tals com­ply with the pro­gram, Sanofi said, it would hap­pi­ly con­tin­ue work­ing with HRSA; if not, Sanofi said it would still sell its drugs to those hos­pi­tals at 340B prices, just out­side of the gov­ern­ment’s purview. The drug­mak­er al­so took ex­cep­tion with con­tract phar­ma­cies that 340B providers use to dis­trib­ute the pro­gram’s out­pa­tient drugs to pa­tients, claim­ing the mid­dle-man arrange­ment cuts ben­e­fits for pa­tients.

“Sad­ly, and con­trary to re­cent pub­lic state­ments by oth­er pro­gram stake­hold­ers, pa­tients do not al­ways ben­e­fit from con­tract phar­ma­cy arrange­ments,” a spokes­woman told End­points News via email. “Of­ten pa­tients re­ceive no dis­count at all on con­tract phar­ma­cy-dis­pensed drugs, and 340B cov­ered en­ti­ties’ own in-house phar­ma­cies are much more like­ly to pro­vide dis­counts to pa­tients than phar­ma­cy chains.”

No­var­tis is tak­ing an even more di­rect line of at­tack on con­tract phar­ma­cies, tak­ing on a “fo­cus-based ap­proach” that would on­ly hon­or dis­counts for 340B providers that use con­tract phar­ma­cies with­in a 40-mile ra­dius of their lo­ca­tion.

“The over­whelm­ing ma­jor­i­ty of dis­counts from med­i­cines dis­pensed at con­tract phar­ma­cies are not shared with pa­tients,” a spokesper­son said by email. “The dis­counts ben­e­fit for-prof­it phar­ma­cies, third-par­ty ad­min­is­tra­tors, oth­er mid­dle­men and hos­pi­tals, with no re­quire­ment that those funds be used for char­i­ta­ble care at hos­pi­tals.”

As­traZeneca was more coy in its re­sponse, say­ing its re­la­tion­ship with 340B con­tract phar­ma­cies “ful­ly com­plies with all op­er­a­tive re­quire­ments.”

Spokes­peo­ple for Unit­ed, Eli Lil­ly and Mer­ck could not be reached for com­ment by press time.

The de­ci­sion by top state at­tor­neys to team up in their pur­suit of chron­ic 340B jumpers is the lat­est es­ca­la­tion in a years-long war of words be­tween Big Phar­ma and HRSA over the 340B pro­gram. Com­pa­nies have long threat­ened to force their hand, claim­ing du­pli­cate dis­count­ing has led to over­charg­ing.

In their let­ter, the at­tor­neys gen­er­al called out drug­mak­ers’ “deeply trou­bling” de­ci­sion to go ahead with their da­ta roundups amid the Covid-19 pan­dem­ic, a de­ci­sion they said could have an ad­verse im­pact on low-in­come pa­tients.

“Not on­ly are the man­u­fac­tur­ers’ ac­tions an at­tempt to dis­rupt long-set­tled ex­pec­ta­tions and ex­ist­ing con­trac­tu­al arrange­ments for dis­pens­ing 340B drugs, but they have been tak­en when mil­lions of Amer­i­cans in our re­spec­tive States are al­ready reel­ing from the grave health and fi­nan­cial con­se­quences caused by a his­toric pan­dem­ic and un­prece­dent­ed eco­nom­ic cri­sis,” the pros­e­cu­tors said. “We urge HHS to do more than de­cry these un­law­ful prac­tices and pro­vide im­me­di­ate re­lief.”

Pi­o­neer­ing Click Chem­istry in Hu­mans

Reimagining cancer treatments

Cancer is a leading cause of death worldwide, accounting for nearly 10 million deaths in 2020, which is nearly one in six deaths. Recently, we have seen incredible advances in novel cancer therapies such as immune checkpoint inhibitors, cell therapies, and antibody-drug conjugates that have revamped cancer care and improved survival rates for patients.

Despite this significant progress in therapeutic targeting, why are we still seeing such a high mortality rate? The reason is that promising therapies are often limited by their therapeutic index, which is a measure of the effective dose of a drug, relative to its safety. If we could broaden the therapeutic indices of currently available medicines, it would revolutionize cancer treatments. We are still on the quest to find the ultimate cancer medicine – highly effective in several cancer types, safe, and precisely targeted to the tumor site.

Joshua Cohen (L) and Justin Klee, Amylyx co-CEOs

BREAK­ING: Af­ter long and wind­ing road, FDA ap­proves Amy­lyx's ALS drug in vic­to­ry for pa­tients and ad­vo­ca­cy groups

For just the third time in its 116-year history, the FDA has approved a new treatment for Lou Gehrig’s disease, or ALS.

US regulators gave the thumbs-up to the drug, known as Relyvrio, in a massive win for patients and their families. The approval, given to Boston-area biotech Amylyx Pharmaceuticals, comes after two years of long and contentious debates over the drug’s effectiveness between advocacy groups and FDA scientists, following the readout of a mid-stage clinical trial in September 2020.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 151,200+ biopharma pros reading Endpoints daily — and it's free.

Ivan Cheung, Eisai US chairman and CEO

Bio­gen, Ei­sai re­fresh amy­loid hy­poth­e­sis with PhI­II show­ing Alzheimer's med slows cog­ni­tive de­cline

In the first look at Phase III data for lecanemab, Eisai and Biogen’s follow-up Alzheimer’s drug to the embattled Aduhelm launch, results show the drug passed with flying colors on a test looking at memory, problem solving and other dementia metrics.

One of the most-watched Alzheimer’s therapies in the clinic, lecanemab met the study’s primary goal on the CDR-SB — Clinical Dementia Rating-Sum of Boxes — giving the biotech the confidence to ask for full approval in the US, EU and Japan by next March 31. The experimental drug reduced clinical decline on the scale by 27% compared to placebo at 18 months, the companies said Tuesday night Eastern time and Wednesday morning in Japan.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 151,200+ biopharma pros reading Endpoints daily — and it's free.

Some­one old, some­one new: Mod­er­na pro­motes CTO, raids No­var­tis for re­place­ment amid pipeline push

Moderna CEO Stéphane Bancel made clear on the last quarterly call that “now is not the time to slow down.” On Thursday, he made a bit more room in the cockpit.

The company unveiled a new executive role on Thursday, promoting former chief technical operations and quality officer Juan Andres to president of strategic partnerships and enterprise expansion, and poaching a former Novartis exec to take his place.

Gilead names 'k­ing­pin­s' in coun­ter­feit HIV med law­suit

Gilead is mounting its counterfeit drug lawsuit, naming two “kingpins” and a complex network of conspirators who allegedly sold imitation bottles of its HIV meds, some of which ended up in US pharmacies.

The pharma giant on Wednesday provided an update on what it called a “large-scale, sophisticated counterfeiting conspiracy,” accusing two new defendants of “leading and orchestrating” a scheme to sell hundreds of millions of dollars in illegitimate drugs posing as meds such as Biktarvy and Descovy.

Tar­sus looks to raise aware­ness of eye­lid mite dis­ease in cam­paign aimed at eye­care spe­cial­ists

Eyelid mite disease may be “gross” but it’s also fairly common, affecting about 25 million people in the US.

Called demodex blepharitis, it’s a well-known condition among eyecare professionals, but they often don’t always realize how common it is. Tarsus Pharmaceuticals wants to change that with a new awareness campaign called “Look at the Lids.”

The campaign and website debut Thursday — just three weeks after Tarsus filed for FDA approval for a drug that treats the disease.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 151,200+ biopharma pros reading Endpoints daily — and it's free.

Nooman Haque, head of life sciences and healthcare at Silicon Valley Bank, and John Carroll

I’m head­ed to Lon­don soon for #EU­BIO22. Care to join me?

It was great getting back to a live ESMO conference/webinar in Paris followed by a live pop-up event for the Endpoints 11 in Boston. We’re staying on the road in October with our return for a live/streaming EUBIO22 in London.

Silicon Valley Bank’s Nooman Haque and I are once again jumping back into the thick of it with a slate of virtual and live events on October 12. I’ll get the ball rolling with a virtual fireside chat with Novo Nordisk R&D chief Marcus Schindler, covering their pipeline plans and BD work.

FDA's ad­vanced ther­a­pies of­fice pro­vides more clar­i­ty on gene ther­a­py CMC con­sid­er­a­tions

As the Office of Tissue and Advanced Therapies (OTAT) transforms into the Office of Therapeutic Products (OTP), with new user fee funds and “super office” status, the department focused on cell and gene therapies also opened its doors to a town hall Thursday offering clarification on guidance and regulations for manufacturers.

Some of the major concerns from manufacturers were the CMC considerations between first-in-human studies and late-phase studies supporting a marketing approval.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 151,200+ biopharma pros reading Endpoints daily — and it's free.

Pa­tient re­port finds con­sti­pa­tion con­di­tion not well-man­aged, open­ing door for bet­ter ed­u­ca­tion from phar­ma

Advertising for constipation treatments often uses light-hearted humor in an effort to spur open discussions about the sometimes stigmatized topic. However, that may not be enough to get people to take the condition seriously, a new patient report from Phreesia finds.

Fewer than one-fifth (17%) of patients with constipation surveyed understand the longer-term health risks of constipation such as hemorrhoids and bowel incontinence. Many are trying to manage their condition with over-the-counter medicines, but often for much longer than recommended. An equal 68% say they use home remedies or OTC meds to manage constipation. But while 90% understand that OTCs are not intended for long-term use, 50% have used an OTC constipation medicine for more than a year.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 151,200+ biopharma pros reading Endpoints daily — and it's free.