Dive Brief:
- Hospitals are urging federal regulators to take action against drugmakers for implementing new requirements for medications dispensed in the 340B drug discount program.
- In January, Eli Lilly said it would begin requiring providers to submit claims data for all of its drugs dispensed in 340B. Now, another drugmaker, Novo Nordisk, is implementing a similar policy, the American Hospital Association said in a Tuesday letter to the Health Resources and Services Administration.
- The AHA argued the requirements were onerous, while the pharmaceutical manufacturers said they improve transparency in 340B and help detect fraud, abuse and duplicate discounts.
Dive Insight:
The 340B program requires pharmaceutical companies to offer outpatient drugs to providers who serve low-income and uninsured patients at a discount.
The program has grown significantly since its inception in 1992, leading drugmakers to argue the funds are being used by hospitals to boost their own profits. But hospitals say 340B is a critical lifeline for safety-net providers, allowing them to offer free care for the uninsured and maintain their offerings.
The conflict has gone to the courts. In 2024, several drugmakers moved to give hospitals after-the-fact rebates on 340B drugs, instead of upfront discounts. They later sued the HRSA for blocking their attempts.
Then, the Trump administration said it would pilot a voluntary rebate program in 340B last year. Hospitals sued to block the pilot, and the HHS said last month it would scrap the program.
Now, another spat between drugmakers and hospitals in the program is brewing.
The hospital lobby argued to HRSA that the labor and expenses needed to comply with the expanded requirements “exceed anything 340B hospitals have faced to date.” The new policy required all 340B entities to submit claims data for its entire portfolio of products, set to take effect on Feb. 1.
The AHA said the vendor used for submitting claims data was rife with problems and errors, adding more costs for providers who would need to closely monitor and fix errors.
Those increasing costs make the policy unlawful, because the 340B statute requires drugmakers to provide covered medications at a discount, the AHA said. The conditions imposed by the new policies could be onerous enough to effectively increase the prices for drugs that are supposed to be discounted.
Lilly said in its own letter to HRSA that the change was consistent with decades of guidance from regulators allowing manufacturers to request information to prevent drug diversion and duplicate discounts.
Collecting the data doesn’t impose new burdens on providers because it relies on information they are already collecting and submitting to insurers, Lilly said in a statement that month.
“So why is the American Hospital Association attacking this change, falsely claiming that it is illegal and burdensome?” the drugmaker said. “Unfortunately, it seems AHA is more committed to concealing the abuse in the 340B program because hospitals profit from it.”
Now, Novo Nordisk has released a similar plan. The manufacturer will require providers to submit claims data for all 340B drugs dispensed, including at in-house and contract pharmacies, effective April 1, according to a notice released Monday.
“This updated policy does not change which entities qualify for 340B pricing, nor does it limit how much product they can purchase at 340B prices,” a Novo Nordisk spokesperson told Healthcare Dive. “It does, however, require that covered entities provide to Novo Nordisk the same types of claims level data that they routinely compile and submit to third-party vendors.”
In the letter, the AHA said the HRSA hadn’t responded to previous complaints about Lilly’s policy, and now another drugmaker was implementing similar requirements.
“HRSA’s silence at this critical moment is troubling,” Chad Golder, general counsel and secretary, wrote in the letter. “We hope that HRSA will take immediate enforcement action, including the use of civil monetary penalties, against both Lilly and Novo to halt their new policies.”
HRSA didn’t respond to a request for comment on the AHA’s letter by press time.
