Johnson & Johnson plans to end upfront discounts for two drugs sold to disproportionate share hospitals under the 340B program, replacing them with a rebate application process, The Wall Street Journal reported Aug. 23.
The drugmaker sent a letter to hospitals Aug. 23 notifying them of the new rebate system for its blood thinner Xarelto and anti-inflammatory drug Stelara. The change, set to take effect Oct. 15, will require 340B hospitals to buy the drugs at commercial prices. Once the drugs are administered, hospitals will need to submit claims data via an online portal to qualify for a rebate.
The hospital advocacy group 340B Health immediately challenged the rebate plan in an Aug. 22 letter to the Health Resources and Services Administration. The advocacy group argues that the 340B statute does not permit compliance through rebates and said the process would create more financial strain for hospitals, especially safety-net facilities.
The American Hospital Association also condemned the plan, telling the Journal it is an "example of big drug companies taking unilateral actions to advantage themselves at the expense of hospitals that care for America’s most vulnerable patients."
A spokesperson for HRSA, which oversees the 340B program, told the publication that J&J's rebate plan does not align with the 340B law and has not been approved by federal officials. An HRSA spokesperson said it would take appropriate action but did not specify what that may entail, according to the report.
Johnson & Johnson defended the rebate plan in an Aug. 22 statement to the Journal.
"Patients are not realizing the full benefit of the 340B program because of rampant abuse and misuse," a spokesperson said. "To help the 340B Program better serve vulnerable patients, J&J is implementing reasonable, standard business practices used across other government programs and contracts."
Read the full article here.