Not cheaper by the dozen: Bristol Myers becomes the 12th pharma company to restrict 340B sales
Bristol Myers Squibb recently joined 11 of its peer pharma companies in limiting how many contract pharmacies can access certain drugs discounted by a federal program known as 340B.
Bristol Myers is just the latest in a series of high-profile pharma companies moving in their own direction as the Biden administration’s Health Resources and Services Administration struggles to rein in the drug discount program for the neediest Americans.
Established in 1992, 340B is a federal health program that requires pharma companies to offer steep discounts on their drugs to hospitals that treat low-income patients. But in the last few years, large pharmas started setting their own restrictions on the ballooning program, claiming that hospitals are using an unlimited number of so-called “contract” pharmacies — an outside pharmacy not owned by the hospital — to obtain more discounts.
The administration has struggled to deal with what pharma companies see as a program that’s grown to almost 10% of the entire US pharma market.
Beginning March 1, 2022, BMS said it will only recognize up to two designated 340B contract pharmacy locations (including one for its blockbuster multiple myeloma drugs like Revlimid and Pomalyst) per 340B hospital that lacks an entity-owned pharmacy. Other similar moves have cost hospitals significantly in lost savings from the discount program.
Recent court decisions, while conflicting on how companies can proceed with their limits on contract pharmacies, noted that Massachusetts-based Beverly Hospital says it lost more than $125,000 in 340B savings since Sanofi’s 340B changes took effect. And, they noted, Rochester, NY-based Strong Memorial Hospital said that Novo Nordisk and other drugmakers “refused to offer drugs at the 340B ceiling price, resulting in overcharges of more than $2 million.”
According to Brian Reid at Real Chemistry’s weekly newsletter, the Bristol Myers move, as well as other companies’ similar ones, means that restrictions on 340B pricing are now in place for eight of the top 10 best-selling drugs in the US, and six of those restrictions have been imposed since Dec. 1.
HRSA is working on a new proposed rulemaking related to its Administrative Dispute Resolution rule, which would establish new requirements and procedures for the 340B program’s process. These procedures would set up a method for hospitals and pharma companies to resolve disputes.
But pursuant to a court order, HRSA is currently enjoined from enforcing these regulations against Eli Lilly.
Maureen Testoni, president and CEO of the hospital association 340B Health, said Bristol Myers, the 12th drug company “to violate the 340B statute,” will “weaken the health care safety net and harm patients who rely on 340B providers for access to affordable drugs and care while enriching the company and its stockholders. In 2020, BMS reported $42.5 billion in revenues, with its cancer drug Revlimid accounting for more than $12 billion.”