HHS cracks down on As­traZeneca, Eli Lil­ly, No­var­tis, No­vo Nordisk and Sanofi for lim­it­ing ac­cess to dis­count­ed drugs un­der the 340B pro­gram

Last sum­mer, some of the world’s top drug­mak­ers took mat­ters in­to their own hands and tried to halt the bal­loon­ing of a fed­er­al health pro­gram that re­quires the com­pa­nies to of­fer steep dis­counts on their prod­ucts to con­tract phar­ma­cies work­ing with hos­pi­tals that pri­mar­i­ly treat low-in­come pa­tients.

Com­pa­nies like No­var­tis and Eli Lil­ly raised con­cerns that the pro­gram, known as 340B, had grown be­yond what it was ini­tial­ly tasked to do. They al­so ex­plained how the pro­gram was lin­ing the pock­ets of these hos­pi­tals. The hos­pi­tals, mean­while, de­nounced the uni­lat­er­al moves by the drug­mak­ers to stop of­fer­ing the low­ered prices to con­tract phar­ma­cies and com­plained to HHS’ Health Re­sources and Ser­vices Ad­min­is­tra­tion (HRSA), which runs the 340B pro­gram.

Di­ana Es­pinosa

On Mon­day, HHS took the side of the hos­pi­tals.

HRSA Act­ing Ad­min­is­tra­tor Di­ana Es­pinosa sent iden­ti­cal let­ters to As­traZeneca, Eli Lil­ly, No­var­tis, No­vo Nordisk, Sanofi and Unit­ed Ther­a­peu­tics, ex­plain­ing how the ad­min­is­tra­tion has de­ter­mined that their poli­cies that place re­stric­tions on 340B pro­gram pric­ing re­lat­ed to con­tract hos­pi­tal phar­ma­cies are in di­rect vi­o­la­tion of the 340B statute.

“Noth­ing in the 340B statute grants a man­u­fac­tur­er the right to place con­di­tions on its ful­fill­ment of its statu­to­ry oblig­a­tion to of­fer 340B pric­ing on cov­ered out­pa­tient drugs pur­chased by cov­ered en­ti­ties,” Es­pinosa’s let­ter says. “Fur­ther­more, the 340B statute does not per­mit man­u­fac­tur­ers to im­pose con­di­tions on cov­ered en­ti­ties’ ac­cess to 340B pric­ing, in­clud­ing the pro­duc­tion of claims da­ta.”

Es­pinosa al­so ex­plained how if the com­pa­nies claim their re­stric­tive ac­tions are to pre­vent di­ver­sions and du­pli­cate dis­counts, there’s a mech­a­nism by which they can ad­dress these con­cerns with an au­dit and sub­mit­ting a claim through an Ad­min­is­tra­tive Dis­pute Res­o­lu­tion process.

The let­ters al­so tell the com­pa­nies that they “must im­me­di­ate­ly be­gin of­fer­ing” cov­ered out­pa­tient drugs at the 340B ceil­ing price to cov­ered en­ti­ties through their con­tract phar­ma­cy arrange­ments, re­gard­less of whether they pur­chase through an in-house phar­ma­cy.

Sanofi said in an emailed state­ment that it sup­ports the core ob­jec­tive of the 340B pro­gram to in­crease ac­cess to out­pa­tient drugs for unin­sured and vul­ner­a­ble pop­u­la­tions.

“How­ev­er, waste and abuse in the form of du­pli­cate dis­counts – when man­u­fac­tur­ers pay Med­ic­aid re­bates on 340B-priced drugs – has be­come in­creas­ing­ly preva­lent in re­cent years with over 30% of Health Re­sources and Ser­vices Ad­min­is­tra­tion (HRSA) au­dits of cov­ered en­ti­ties in 2018-2019 find­ing Med­ic­aid du­pli­cate dis­count­ing,” the com­pa­ny said. Sanofi last Oc­to­ber launched an ini­tia­tive to lim­it the use of con­tract phar­ma­cies and col­lect lim­it­ed, de-iden­ti­fied, claims da­ta on 340B-priced drugs dis­pensed by con­tract phar­ma­cies.

Lil­ly said in a state­ment that it “has con­tin­ued to of­fer 340B ceil­ing prices to all cov­ered en­ti­ties, and be­lieves that pa­tients – not large, for-prof­it con­tract phar­ma­cies — should ben­e­fit from those 340B drug dis­counts.” And No­var­tis said it will give the let­ter a thought­ful re­view and re­spond to HRSA.

The oth­er com­pa­nies did not im­me­di­ate­ly re­spond to a re­quest for com­ment, but the bio­phar­ma in­dus­try group PhRMA al­so ex­pressed con­cerns with the 340B pro­gram.

Nicole Lon­go

“We con­tin­ue to have con­cerns with the in­creas­ing num­ber and role of con­tract phar­ma­cies in the 340B pro­gram and the lack of ev­i­dence that their par­tic­i­pa­tion in 340B has im­proved pa­tients’ ac­cess to med­i­cines. The fact is that con­tract phar­ma­cies were nev­er au­tho­rized by Con­gress in statute, nor does the 340B statute re­quire man­u­fac­tur­ers to ship 340B med­i­cines to con­tract phar­ma­cies,” said PhRMA spokesper­son Nicole Lon­go.

“Con­tract phar­ma­cies on­ly ap­pear in sub-reg­u­la­to­ry guid­ance, which can­not im­pose any bind­ing re­quire­ments on the pub­lic and lack the force and ef­fect of law. Past re­ports from in­de­pen­dent gov­ern­ment watch­dogs have shown there is lit­tle to no over­sight of con­tract phar­ma­cies and no way of en­sur­ing cov­ered en­ti­ties are us­ing the pro­gram to the ben­e­fit of Amer­i­ca’s vul­ner­a­ble pa­tients. That’s why we are ad­vo­cat­ing for mean­ing­ful im­prove­ments to the pro­gram that en­sure pa­tients di­rect­ly ben­e­fit from the tens of bil­lions of dol­lars in dis­counts that man­u­fac­tur­ers pro­vide each year,” she added.

Oth­ers rep­re­sent­ing the hos­pi­tal in­dus­try were pleased by the let­ters from HRSA.

“As we have been say­ing for near­ly a year, the 340B statute re­quires drug man­u­fac­tur­ers par­tic­i­pat­ing in the pro­gram to pro­vide dis­count­ed prices to sup­port the care of pa­tients. The de­nial of these dis­counts has dam­aged providers and pa­tients and must stop. It is vi­tal that these com­pa­nies im­me­di­ate­ly be­gin to re­pay the mil­lions of dol­lars owed to these providers,” 340B Health, a non­prof­it mem­ber­ship or­ga­ni­za­tion of more than 1,400 pub­lic and pri­vate non-prof­it hos­pi­tals and health sys­tems, said in a state­ment.

The Big Phar­ma dis­card pile; Lay­offs all around while some biotechs bid farewell; New Roche CEO as­sem­bles top team; and more

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With earnings seasons in full swing, we’ve listened in on all the calls so you don’t have to. But news is popping up from all corners, so make sure you check out our other updates, too.

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Sen. Ron Wyden (D-OR) (Francis Chung/E&E News/Politico via AP Images)

In­fla­tion re­bates in­com­ing: Wyden calls on CMS to move quick­ly as No­var­tis CEO pledges re­ver­sal

Senate Finance Chair Ron Wyden (D-OR) this week sent a letter to the head of the Centers for Medicare & Medicaid Services seeking an update on how and when new inflation-linked rebates will take effect for drugs that see major price spikes.

The newly signed Inflation Reduction Act requires manufacturers to pay a rebate to Medicare when they increase drug prices faster than the rate of inflation.

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Trodelvy notch­es a win in most com­mon form of breast can­cer

Following a promise last year to go “big and fast in breast cancer,” Gilead has secured a win for Trodelvy in the most common form.

The drug was approved to treat HR-positive, HER2-negative breast cancer patients who’ve already received endocrine-based therapy and at least two other systemic therapies for metastatic cancer, Gilead announced on Friday.

Trodelvy won its first indication in metastatic triple-negative breast cancer back in 2020, and has since added urothelial cancer to the list. HR-positive HER2-negative breast cancer accounts for roughly 70% of new breast cancer cases worldwide per year, according to senior VP of oncology clinical development Bill Grossman, and many patients develop resistance to endocrine-based therapies or worsen on chemotherapy.

Giovanni Caforio, Bristol Myers Squibb CEO (Nicolas Messyasz/Sipa via AP Images)

Bris­tol My­ers turns at­ten­tion to new prod­ucts in wake of Revlim­id patent loss

Bristol Myers Squibb CEO Giovanni Caforio is shifting his focus to newer products as generic sales continue to gnaw at the company’s blockbuster myeloma drug Revlimid.

Both Revlimid and Abraxane sales took a dive last year thanks to generic rivals, BMS reported in its Q4 and full-year results on Thursday. As a result, Q4 sales dipped 5% and full-year sales remained flat. However, Caforio sees a silver lining — or rather, two of them.

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Rob Davis, Merck CEO

Mer­ck’s Keytru­da nears $21B in sales, dou­bles down on com­bo tri­als

Merck’s cancer immunotherapy Keytruda notched sales of $20.9 billion in 2022, cementing its status as one of the world’s top-selling drugs. However, it’s far from resting on that accomplishment.

Merck executives touted nine ongoing trials in its annual earnings call on Thursday, including five studies in Phase III, for Keytruda (pembrolizumab) in combination with other immuno-oncology drugs. The trials include combinations with Merck’s own developments as well as other pharma companies’ candidates, including its melanoma collaboration with Moderna and its mRNA technology plus Keytruda, aimed at creating a personalized vaccine treatment to reduce the risk of cancer recurrence or death.

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Uğur Şahin, BioNTech CEO (Andreas Arnold/picture-alliance/dpa/AP Images)

BioN­Tech opens new plas­mid DNA man­u­fac­tur­ing fa­cil­i­ty in Ger­many

German mRNA player BioNTech opened the doors to a new manufacturing facility on Thursday, this one just about 75 miles north of its headquarters in Mainz, Germany.

BioNTech announced on Thursday that it has completed the construction of its first plasmid DNA manufacturing facility in Marburg, Germany. The facility will produce materials for mRNA-based vaccines and therapies along with cell therapies.

FDA ap­proves GSK's ane­mia drug with safe­ty warn­ing — af­ter bat­ting back sim­i­lar drugs

GSK has secured the first of four US approvals it’s hoping for this year, as the FDA greenlit daprodustat as a treatment for anemia due to chronic kidney disease.

But the FDA limited the use of the drug, to be marketed as Jesduvroq, to patients who have been receiving dialysis for at least four months and stopped short of approving it for patients not dependent on dialysis — in line with the recommendations of the advisory committee it consulted.

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Photo: Julia Weeks/AP Images

FDA ax­es re­quire­ment for pos­i­tive Covid test be­fore Paxlovid use

FDA announced today that doctors and pharmacists can now prescribe Paxlovid to patients without a positive test for Covid-19.

CDER Director Patrizia Cavazzoni reissued Paxlovid’s authorization letter Wednesday, saying it has revised the authorization to “no longer require positive results of direct SARS-CoV-2 viral testing.” The EUA now requires instead that adults and kids 12 years of age and older have a “current diagnosis of mild-to-moderate COVID-19.”

Lars Fruergaard Jørgensen, Novo Nordisk CEO (Christopher Goodney/Bloomberg via Getty Images)

No­vo Nordisk notch­es big GLP-1 sales amid re­bound­ing sup­plies, but cau­tions on fu­ture 'pe­ri­od­ic con­straints'

With Novo Nordisk’s obesity treatment Wegovy fully back in stock in December, sales are beginning to soar, the Danish pharma reported during its annual earnings call on Wednesday. Total scripts of the glucagon-like peptide 1 (GLP-1) Wegovy topped 37,000 weekly in mid-January, a hockey stick uptick from end-of-year levels below 15,000 per week.

The new prescriptions come on top of the overall momentum of Novo obesity drug sales in 2022, although the then supply-constrained Wegovy was only part of that. Sibling obesity med Saxenda accounted for DKK 10.7 billion ($1.58 billion) of the total DKK 16.9 billion ($2.49 billion), or about 63%, in Novo Nordisk’s reported obesity segment sales.