On Wednesday, September 2, 2020, Komplete 340B Solutions sent a letter to Secretary Azar regarding the recent announcements from major pharmaceutical companies impacting contract pharmacy participation in the 340B Program. This letter had an additional 58 signatures from other Covered Entities expressing their dire concerns around the “integrity initiative” proposed by Big Pharma. The response letter from Krista Pedley, Assistant Surgeon General of HRSA and Secretary Azar is below:

December 9, 2020

Mr. Harry Norsworthy, RPh, ACE
Chief Executive Officer / Owner 
Komplete 340B Solutions 

Dear Mr. Norsworthy:

Secretary Azar asked me to thank you for your letter regarding recent actions by several drug manufacturers impacting covered entities that participate in the 340B Drug Pricing Program (340B Program). 

Your letter raises concerns about specific actions that limit access to 340B drugs.  For example, Eli Lilly USA (Lilly) is no longer providing 340B discounts on several of its drug products to covered entities through contract pharmacy arrangements.  Several other manufacturers have also announced plans not to sell 340B drugs to contract pharmacies, while others are limiting sales by requiring specific data requirements or selling drug products only after a covered entity has demonstrated 340B compliance.  

The Health Resources and Services Administration (HRSA) is continuing to review the various proposals and whether these actions by manufacturers violate the 340B statute and whether sanctions may apply.  Under section 340B(a)(1) of the Public Health Service Act (PHSA), a manufacturer participating in the 340B Program must offer its covered outpatient drugs for purchase at or below the 340B ceiling price.  Those sanctions could include, but are not limited to, civil monetary penalties pursuant to section 340B (d)(1)(B)(vi) of the PHSA.  In a letter to Lilly posted on the 340B website, the U.S. Department of Health and Human Services reiterates its concern with actions such as those Lilly is taking. [1]

The 340B statute does not specify the mode by which 340B drugs may be dispensed.  HRSA believes contract pharmacies serve a vital function in covered entities’ ability to serve underserved and vulnerable populations, particularly as many covered entities do not operate in-house pharmacies. 

HRSA believes that manufacturers that refuse to honor contract pharmacy orders could limit access to 340B-discounted drugs for many underserved and vulnerable populations who may be located in geographically isolated areas and rely on contract pharmacies as a critical point of access for obtaining their prescriptions.  To this end, HRSA continues to strongly encourage all manufacturers to sell 340B priced drugs to covered entities directly and through contract pharmacy arrangements. 

Some covered entities have reached out to HRSA expressing concern that they are unable to receive the 340B ceiling price on certain drug products due to these recent actions.  HRSA is working closely with each impacted covered entity and is actively investigating the matter in order to make a final determination as to any potential action.  Please share my letter with your co‑signers.

Sincerely,

Krista M. Pedley, PharmD, MS
RADM, USPHS
Assistant Surgeon General
Director, Office of Pharmacy Affairs
Health Resources and Services Administration

 1 See: https://www.hrsa.gov/sites/default/files/hrsa/opa/pdf/hhs-eli-lilly-letter.pdf

So, what’s next? We want to hear from you!

Komplete 340B Solutions requests your involvement again and this time, we want you to specifically demonstrate the negative impact from the manufacturer’s actions and to project future cost impacts if these arbitrary actions are not stopped immediately.

Our reply to Admiral Pedley will be a summary of your asks and requests to stop Big Pharma’s attack on critical access, rural, DSH and other entities that perilously depend on the 340B Program.

Our hope is to set up direct meeting with Admiral Pedley to address these concerns directly. 

Thank you for working with Komplete 340B Solutions to ensure all of our concerns are heard.