HRSA accuses Merck of denying 340B discounts

Photo: Shana Novak/Getty Images

Late last week, the Health and Resources Services Administration (HRSA) sent a letter to Merck warning that it may be dealt monetary penalties for allegedly refusing to give 340B discounts to covered entities.

HRSA first contacted Merck about the matter in May, when the agency instructed the biopharmaceutical company to comply with 340B statutory obligations, and immediately begin offering its covered outpatient drugs at the 340B ceiling price to covered entities that dispense the discounted medications through their contract pharmacy arrangements.

HRSA informed Merck that continued failure to provide the 340B price to covered entities utilizing contract pharmacies could result in civil monetary penalties.

“Given Merck’s continued refusal to comply, HRSA has referred this issue to the HHS Office of the Inspector General (OIG) in accordance with the 340B Program Ceiling Price and Civil Monetary Penalties Final Rule,” the letter read.

WHAT’S THE IMPACT

Merck is the latest drug company singled out for potential fines. Penalties could exceed $6,000 per violation.

On October 17, HRSA sent letters to drugmakers AbbVie and Amgen telling them of violations of the 340B Statute over contract pharmacy restrictions.

Other drug companies previously put on notice include AstraZeneca, Boehringer Ingelheim, Novartis, Eli Lilly, Sanofi, Novo Nordisk and United Therapeutics.

The Biden administration has referred the drugmakers, including Merck, to the Office of Inspector General despite litigation between drugmakers and the Department of Health and Human Services over whether the 340B statute compels them to offer discounts to hospitals using contract pharmacies.

=Sanofi, meanwhile, maintained it will pay Medicaid and insurers’ rebate invoices accurately, and said it’s in compliance with the 340B statute.

THE LARGER TREND

A federal judge in September said HHS must immediately stop the 30% drug reimbursement cuts to hospitals in the 340B program. The order rejected HHS’ plan to wait until January 1, 2023, to restore the full outpatient drug payment rates to 340B hospitals, and vacated the drug reimbursement rate for 340B hospitals in the 2022 Outpatient Prospective Payment System (OPPS) Rule.

In June, the U.S. Supreme Court ruled the 340B cuts for 2018 and 2019 were unlawful but had not ruled on 2020 or afterward.

The American Hospital Association said it was continuing to urge the administration to reimburse all the hospitals that were affected by these cuts in previous years.
 

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