Astra-Zeneca Announces It Will No Longer Offer 340B Discounts at Most Contract Pharmacies

17 Aug 2020

Today, Astra-Zeneca joined other manufacturers in announcing that it would no longer honor all contract pharmacy arrangements. Astra-Zeneca sent letters to 340B covered entities informing them that, effective October 1, 2020, Astra-Zeneca will not honor contract pharmacy arrangements for covered entities except for those covered entities that do not have an on-site dispensing pharmacy.  If a covered entity does not have an on-site pharmacy, Astra-Zeneca will honor only one contract pharmacy arrangement (covered entities must contact Astra-Zeneca to make this arrangement).  In a separate letter to wholesalers, Astra-Zeneca stated that it will honor 340B pricing on all chargeback invoices prior to October 1, “but AstraZeneca asks for the removal of contract pharmacy eligibility prior to or by the end of business September 30, 2020.”  Astra-Zeneca’s decision parallels those made by Sanofi – which has threatened not to honor contract pharmacy arrangements for those covered entities that do not enroll in the 340B ESP data collection project by October 1 – and Eli Lilly’s announcement, effective July 1, that it refuses to honor most contract pharmacy arrangements for its drug Cialis.

Since 1996, HRSA has provided guidance indicating that the 340B statute does not exempt manufacturers from selling 340B drugs to covered entities even if the covered entities direct the manufacturers to ship the drugs to a separate location, which would encompass a contract pharmacy location. In 2010, HRSA expanded its guidance to provide a framework by which a covered entity could contract with multiple contract pharmacies consistent with the covered entities’ obligations to abide by 340B program requirements, including the diversion prohibition. HRSA has indicated that it stands by its prior guidance but, to date, has not indicated a willingness to confront manufacturers regarding their recent decisions to reject nearly 25 years of practice under the statute.

Category: Drug Pricing

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