Apexus, a key contractor for the 340B drug pricing program, has come under scrutiny for profiting off its expanding role in the program, which was initially designed to help safety-net hospitals provide discounted drugs to low-income patients, The New York Times reported Jan. 15.
Here are five things to know:
- Apexus, a for-profit subsidiary of Vizient, has managed the 340B program for two decades. The program, designed to provide safety-net hospitals access to discounted drugs, has expanded significantly, with the company handling negotiations and overseeing drug distributions for hospitals.
- The company's role in the program has raised concerns, as its strategies to expand the program's reach often result in higher prices for patients. Through its "purchasing optimization team" and consulting services, Apexus helps hospitals increase their drug purchases under 340B, which can be marked up and passed on to insurers and patients, the report said.
- A report from the state of New York found the cost of the program increased by more than 200% in three years, partly due to these profit-driven practices.
- Apexus' business model evolved to profit from a growing 340B market, with revenue doubling between 2018 and 2022. Critics argue that the company has crossed ethical lines by pushing for expansion even when it meant exploiting program loopholes to maximize earnings.
- Internal complaints and whistleblower reports suggest the company has influenced hospitals' drug-purchasing decisions to benefit from higher 340B sales, according to the Times.
Apexus provided a statement to Becker's, in repsonse to the Times article.
"Apexus is proud of the work we do to support the 340B program, which is vital to the nation’s safety net providers serving vulnerable patient populations," the statement reads."The 340B program is managed by the Health Services Resources Administration (HRSA) not by Apexus. Apexus’ role is limited to the deliverables within the prime vendor agreement, a subcomponent of the 340B program. Apexus has no role in setting drug prices for patients or reimbursement for covered entities. Our role as the 340B prime vendor is to negotiate discounts with participating suppliers and to help foster program integrity and administrative compliance by covered entities. Further, Apexus has rigorously complied with all legal and contractual obligations contained in our prime vendor agreement with the Health Services Resources Administration (HRSA).”