Fierce Pharma Politics—Pushback escalates after drug companies restrict 340B drug discounts

Patient advocates protested AstraZeneca's recent move to restrict 340B drug discounts at the company's headquarters last Wednesday. (AIDS Healthcare Foundation)(AHF)

Welcome to the FiercePharma political roundup, where each Monday we’ll highlight developments in Washington, D.C., and elsewhere that could affect drug pricing and how drugmakers operate. 

After AstraZeneca’s move to stop selling discounted drugs to safety net providers through contract pharmacies, patient advocates took the drugmaker to task.

Outside AZ’s Delaware headquarters, protestors blasted the company’s recent decision to restrict the sale of discounted meds through contract pharmacies under the federally mandated 340B Drug Pricing Program. The program requires companies to discount medicines to hospitals and clinics that serve disadvantaged communities.

But AstraZeneca isn’t alone in cracking down on drugs sold under the 340B program. Eli Lilly, Sanofi, Novartis and Merck & Co. have also implemented new restrictions or initiatives, according to reports. In August, seven hospital and pharmacy groups asked (PDF) U.S. Department of Health and Human Services (HHS) secretary Alex Azar to enforce the 340B rules following new moves from the companies.

Last week's protest followed a lawsuit (PDF) filed by Ryan White Clinics for 340B Access against HHS calling on the agency to force AZ, Eli Lilly, Novartis and Sanofi to comply with 340B requirements. The group alleges the companies “flouted the 340B statute and regulation by openly refusing to sell 340B discounted drugs to covered entities when ordered via contract pharmacy arrangements.”

An AstraZeneca spokesman said via email the company is "strongly committed" to the 340B program. The company's products "have been—and will continue to be—available to all covered entities at or below applicable statutory ceiling prices," he said, adding that the company's "new approach to contract pharmacy arrangements fully complies with all operative requirements."

As for Eli Lilly, a spokesman said the lawsuit against HHS "improperly seeks to change the law through litigation to force Lilly to provide discounts to for-profit pharmacies who aren’t entitled to them."

"Worse, it ignores the core problem of those corporate intermediaries pocketing the 340B discounts rather than passing them on to patients," the Lilly spokesman said. The company believes "patients, not companies," should receive the benefits of discounted drugs.

A Novartis spokesman said the company agrees with the "principles" of the federal program, but it argues the "340B program has grown beyond its original intent and we believe that responsible 340B program reform is needed." Sanofi likewise said it agrees with "core objectives" with the 340B program, but that "waste and abuse in the form of duplicate discounts ... has become increasingly prevalent." On Oct. 1, Sanofi started collecting de-identified claims data to address that concern, a spokeswoman said.

Likewise, Merck said it "strongly supports" the 340B program but that it's "grown well beyond its intended purpose and requires greater transparency, regulatory oversight, and accountability to ensure that it continues to effectively serve patients as intended and remains sustainable over the long-term."

RELATED: Bipartisan group of Senate, House lawmakers press HHS to quash drug companies' 340B moves

The issue has captured the attention of a large number of lawmakers as well. Last month, a bipartisan group of nearly 250 members of the House and 28 senators wrote to HHS urging the agency to crack down on such actions. The 340B program helps safety net hospitals and rural health facilities provide care in underserved areas, and senators wrote in their letter (PDF) that certain companies have implemented new “burdensome requirements” on those facilities that aren’t part of the program.

New policies by the companies “run counter to the statute and create a dangerous and negative precedent for the 340B Program and the providers and patients it serves," the senators wrote.

Further, the issue is getting attention at HHS. The agency's general counsel, Robert Charrow, raised his own concerns in a Sept. 21 letter (PDF) to Eli Lilly general counsel Anat Hakim. Lilly's "unilateral" policy raises a number of concerns, including that at the "very least" it's "insensitive to the recent state of the economy," Charrow wrote.