Michigan Attorney General Dana Nessel recently joined a bipartisan coalition of attorneys general urging the U.S. Department of Health and Human Services (HHS) to hold accountable drug manufacturers that are unlawfully refusing to provide discounts to federally qualified health centers, hospitals and other providers that serve vulnerable patient populations through the 340B Drug Pricing Program.
The 340B Drug Pricing Program provides discounts to covered health care providers that serve uninsured and low-income patients, and helps these providers keep costs low even as prescription drug prices rise. In their letter to HHS Secretary Alex Azar, the attorneys general argue that by withholding or threatening to withhold these critical discounts, drug manufacturers Eli Lilly & Co., AstraZeneca PLC, Sanofi SA, Novartis Pharmaceuticals, Merck & Co., United Therapeutics Corp. and others put low-income patients at risk of losing access to affordable medications while communities continue to battle the COVID-19 pandemic.
The 340B Drug Pricing Program has strong bipartisan support, and Congress has acted numerous times to ensure drug manufacturers continue to comply with the program’s mandates.
“Drug companies are undermining this critical program at a time when providers are struggling to serve their communities and many families are likewise struggling to make ends meet at home,” Nessel said. “This pandemic has taken a toll on our nation’s economy and health, and for these companies to deliberately disobey government rules by withholding discounts and resources vulnerable patients rely on is unconscionable. My colleagues and I urge the Department of Health and Human Services to act now to end these unlawful actions and require these drug manufacturers to provide these essential mandated discounts.”
As a condition of having their drugs covered by Medicaid and Medicare Part B, Congress required drug manufacturers to enter into Pharmaceutical Pricing Agreements (PPA) with the HHS Secretary to limit the amount public hospitals, community health centers, and others serving indigent patients have to pay drug manufacturers for medications. These PPAs require the companies to offer each covered medication to providers “at or below the applicable ceiling price.” Instead of complying with their obligations, Eli Lilly & Co., AstraZeneca PLC, Sanofi SA, Novartis Pharmaceuticals, Merck & Co., United Therapeutics Corp. and others have unlawfully refused to provide discounts, potentially depriving Americans who rely on them with essential health care resources they need as the country deals with a public health crisis.
Under the 340B Drug Pricing Program, HHS has the authority to address violations of the program by drug manufacturers. For example, HHS may require manufacturers to reimburse covered health care centers and/or HHS may terminate manufacturers’ PPAs. While HHS has recently published regulations establishing an administrative dispute resolution (ADR) process under which covered entities can file complaints and seek relief, the ADR process is not sufficient to address immediate harm caused by drug companies.
In sending the letter, Nessel is joined by the attorneys general of California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia.
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