Back Off 340B Cuts, HHS Tells Drug Company

Eli Lilly and Company is being presumptuous in assuming that the federal government will approve its plan to cease providing some federally mandated prescription drug discounts under the section 340B prescription drug discount program and does so at its own peril, the U.S. Department of Health and Human Services warned the company in a strongly worded letter.

Without addressing the merits of Eli Lilly’s request, HHS found the manner in which the company sought to force the federal government’s hand on the matter to be unacceptable.  HHS also questioned the timing of the company’s request in its recent letter, writing that

…we believe the timing of your pricing changes is, at the very least, insensitive to the recent state of the economy.  Although the economy is rebounding at a record rate, the unemployment and under-employment rates are still temporarily higher than at the beginning of the year due to COVID-19.  Many Americans and many small businesses have had difficulty making ends meet.  Lilly, on the other hand, seems to be enjoying an outstanding year.

The HHS letter also observes that

…during this same period, most health care providers, many of which are covered entities under section 340B, were struggling financially and requiring federal assistance from the Provider Relief Fund established by the CARES Act.  Many continue to struggle and depend on emergency taxpayer assistance.  It is against this backdrop that you are effectively increasing the price of 10 mg and 20 mg Cialis by more than 500,000 percent and have done the same for other drugs in your portfolio.

The 340B program, which enables hospitals that serve especially large numbers of low-income patients to purchase prescription drugs at a discount to dispense to such patients on an outpatient basis, has long been a vital tool in the ability of private safety-net hospitals to serve their community.  NASH has long supported the program, doing so most recently in a letter earlier this month to members of Congress.

The HHS letter to Eli Lilly and Company – one of five companies attempting to redefine 340B requirements – concludes with a warning that should the company proceed with its plan, doing so could result in legal action “…in the event that Lilly knowingly violates a material condition of the program that results in over-charges to grantees and contractors.”

Go here to see the HHS letter to Eli Lilly and Company.