Since the inception of the 340b program, drug manufacturers have been attempting to curtail it to avoid offering discounts or to prevent double discounts (which occurs when a 340b drug is billed to a Medicaid program). This year, however, there were multiple coordinated attempts by manufacturers to exit the program. For example:

  • AstraZeneca will stop offering 340b discounts to on-site hospital pharmacies starting October 1, 2020.
  • Eli Lilly will no longer offer 340b discounts on drugs shipped by a covered entity to its contracted pharmacy. The manufacturer now requires that the drug be shipped only to approved locations.
  • Merck started auditing covered entities for 340b duplicate discounts. It is asking data in excess of Medicaid claims.
  • Bausch is implementing a “direct distribution” requirement (340b products must be purchased only from the manufacturer’s preferred wholesaler).
  • Other manufacturers – such as Sanofi and Novartis – also challenge 340b program by requiring additional information and audits or limiting 340b discounts.

Many 340b advocacy groups believe that such actions by manufacturers violate federal and state laws, including 340b regulations, Medicaid state and federal regulations, and HIPAA. Several legal commentators are concerned that increased audits and shipment requirements constitute contractual violations between pharmacies and covered entities. It is likely that the 340b program administration will significantly change in the years to come, unless we see a legal action to enjoin the manufacturers from modifying the 340b program, which protects the most vulnerable patient base.