Secretary Azar,
The undersigned organizations – members of Ryan White Clinics for 340B Access (RWC-340B) and our allies – call upon the Department of Health and Human Services (HHS) to take immediate action against certain drug manufacturers that are actively defying their statutory price reduction obligations under the 340B drug discount program. Recent developments, as outlined below, have prompted circulation of this sign-on letter.
- Eli Lilly and Company and AstraZeneca no longer provide covered outpatient drugs at 340B ceiling prices through contract pharmacies, except in very limited situations.
- Sanofi and Novartis have taken the same action for any 340B covered entity that has not registered with its overreaching online platform called 340B ESP™.
- Merck & Co., Inc. has also asked covered entities to register with the 340B ESP™ online platform under the threat of requesting a formal audit for covered entities that do not register.
- And, Kalderos, a vendor that works on behalf of drug manufacturers, is asking covered entities to sign up with its online platform, called 340B Pay, which will deprive covered entities of receiving up front 340B pricing at the point of sale and give them instead a post-sale rebate only if the manufacturer deems the transaction rebate eligible.
These manufacturers’ unilateral policy changes were all announced within a few short months and during a time when Ryan White clinics are simultaneously addressing the COVID-19 pandemic and continuing to fight the HIV/AIDS epidemic. These actions not only ignore manufacturers’ statutory obligation to provide 340B drug pricing, they also establish artificial deadlines demanding cooperation with unnecessary and burdensome claims data collection programs without any assurances that patient privacy will be protected.
RWC-340B is an association of HIV/AIDS health care clinics and service providers that receive funding under the Ryan White CARE Act, either through a primary grant or subgrant, and participate as covered entities in the 340B program. Many Ryan White clinics do not own retail pharmacies so they rely on contract pharmacy arrangements to dispense 340B drugs to their patients. Without decisive action by HHS to protect the contract pharmacy program, some Ryan White clinics will be forced to provide fewer services, to serve fewer patients and/or to close their facilities. These results will certainly reverse the progress that Ryan White clinics have made in helping to achieve the President’s goal to end the HIV/AIDS epidemic by 2030.
These manufacturers’ self-serving policies thwart HHS’s right and responsibility to oversee the program and, if left unaddressed, set a dangerous precedent of allowing manufacturers to self-regulate any other aspect of the 340B program. All these manufacturer actions beg for proper government oversight to ensure fairness and predictability in the 340B program, which would benefit all stakeholders. Most alarming is how these actions will cripple the ability of Ryan White clinics to care for vulnerable patients, undermining our use of the 340B program to protect public health and exacerbating the current public health emergency. We appreciate the September 21, 2020 letter written by HHS General Counsel Robert Charrow to Eli Lilly and Company echoing many of our concerns. But further action by HHS is needed.
We understand that you received multiple letters objecting to these actions from members of Congress, covered entity associations (including RWC-340B), as well as from individual covered entities. This letter is intended to evidence the breadth of support within the Ryan White community for HHS to exercise its authority to oversee the 340B program and not allow manufacturers to dictate their obligations under the program. Specifically, we ask that HHS take measures to ensure that Ryan White clinics continue to have access to 340B ceiling prices at their contract pharmacies by 1) imposing civil monetary penalties on manufacturers; 2) ordering that the drugs produced by these manufacturers no longer be covered under Medicaid and Medicare Part B; and 3) prohibiting Kalderos from redesigning the 340B program into a rebate program.
HRSA-supported Ryan White clinics achieve viral suppression rates far above the national average which results in significantly fewer HIV/AIDS virus transmissions. The savings generated from the 340B program help us to achieve not only better viral suppression rates, but better health outcomes for our patients and communities. The 340B program and access to 340B pricing through contract pharmacies is an essential element of our success story and an important component of the Administration’s goal of ending the epidemic by 2030.
Any threat to the 340B program, especially ones as significant as these, present a serious threat to our communities. Ryan White clinics use 340B savings to support direct health care services, drug adherence and case management programs, education and prevention programs, as well as many other measures to benefit their patients and communities. Services such as testing, linkage to care, retention in care, medication adherence, and case management are often unreimbursed or under-reimbursed by payers. Savings from the 340B program give Ryan White clinics the resources to fill the gaps in care that are not covered by insurance and that are vital to reducing viral loads and preventing transmissions.
As such, we call on HHS to stop these manufacturers from restricting access to 340B savings, actions that thwart the agencies’ oversight responsibility, undermine the integrity of the 340B program, jeopardize patient data privacy and directly threaten the access to care we provide to our vulnerable patient populations.
cc: Thomas J. Engels, Administrator
Health Resources and Services Administration
Thomas.Engels@hrsa.hhs.gov
* Note that affiliations are listed only for identification purposes, not to suggest institutional support for this letter.
* We will not use this list for any marketing purposes and signing the petition does not authorize RWC-340B to use or portray that support as an endorsement by your organization/employer.
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