Bristol Myers Squibb restricting 340B discounts to safety net hospitals
The policy is set to begin in March, at which point new access restrictions will be placed on all drugs other than the company's IMiD offerings.
Photo: Jeff Lagasse/Healthcare Finance News
Bristol Myers Squibb will become the 12th drugmaker to restrict 340B discounts after it signaled its intent to limit such discounts for safety net hospitals' contract pharmacies, according to a recent letter the company sent out to hospitals.
The policy is set to begin in March, at which point new access restrictions will be placed on all drugs other than the company's immunomodulatory imide drug (IMiD) offerings. Bristol Myers Squibb will recognize just two contract pharmacies to which it will send 340B-discounted products if the covered entity lacks an in-house pharmacy.
One contract pharmacy will be used for prescribing treatments such as Revlimid, a cancer drug and IMiD, while the other will be used for all remaining drugs. No other contract pharmacies will be offered 340B discounted drugs.
The move does not affect pharmacies wholly owned by a 340B hospital. Federal grantees will still be able to use multiple contract pharmacies for non-IMiD products, and one contract company for IMiDs.
Bristol Myers Squibb maintained that the approach complies with the 340B statutory requirements and will not affect patient access to prescribed medications.
"BMS considers the 340B program to be a critical part of America's healthcare safety net," the company wrote. "BMS also recognizes, however, that the program is evolving and has become increasingly complex for stakeholders to navigate."
The drugmaker invited covered entities to test potential solutions to the challenges facing 340B, inviting them to consider models that may include extending 340B pricing directly to uninsured and vulnerable patients at the point of sale, sharing data to prevent diversion and duplicate discounts, or exploring third party contract pharmacy models that align with state and federal law.
Hospital-covered entities may continue to use wholly owned contract pharmacies to fill 340B prescriptions for their eligible patients, said BMS. All pharmacies that are wholly owned by health systems may be utilized as contract pharmacies by 340B hospitals in the system, but no additional contract pharmacy designation for non-IMiDs would be permitted.
Distribution arrangements for the non-IMiD designated contract pharmacy may be established with any wholesaler or distributor that carries BMS non-IMiD products.
Covered entities may designate contract pharmacies every calendar year, and those with contract pharmacy arrangements terminated mid-year may designate replacement contract pharmacies, according to BMS.
WHAT'S THE IMPACT
BMS is now the 12th drugmaker to restrict 340B discounts, following AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Eli Lilly, Merck, Novartis, Novo Nordisk, Sanofi, UCB and United Therapeutics.
When AbbVie imposed restrictions earlier this month, it drew negative reaction from 140B Health President and CEO Maureen Testoni.
"AbbVie's decision to join the ranks of drug companies that are violating federal law will intensify the damage that 340B pricing refusals are having on the healthcare safety net and hospitals' ability to care for their patients in need," she said at the time. :The federal government has made it clear that drug companies cannot impose unilateral conditions on the 340B drug discounts that the law mandates. Drugmaker demands for millions of patient drug claims through a process that exposes hospitals to potential federal privacy law violations and other legal risks is a prime example of an unlawful condition."
THE LARGER TREND
The Supreme Court in November heard oral arguments over 340B payments for hospitals' outpatient drugs.
The American Hospital Association and several other organizations and health systems originally brought the case in 2018, after the Trump administration issued a final payment rule that decreased the amount of reimbursement hospitals received from the 340B drug payment program by about 30%.
340B Health said two federal district courts have prohibited drug company restrictions or conditions on discounts.
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
