Bristol Myers Squibb becomes 12th drugmaker to announce 340B contract pharmacy restrictions

Bristol Myers Squibb became the 12th company to restrict sales of drugs discounted under 340B to most contract pharmacies.

The drugmaker announced last week that the policy will start in March. It argued in a notice Jan. 14 that the plan complies with the 340B statute even as similar moves by drugmakers are being challenged in court.

Under the new plan, Bristol Myers Squibb will only recognize two contract pharmacies to send 340B-discounted products to if the covered entity does not have an in-house pharmacy.

One of the contract pharmacies will be used for prescribing certain treatments such as the cancer drug Revlimid and the other one will be for the remaining drugs. It will not offer the drugs discounted under 340B to other contract pharmacies beyond those two.

The drugmaker said in a statement that it is committed to maintaining patient access to its products.

“Our new 340B distribution practice reflects the broader integration and alignment of our distribution model, exempts grantees and offers stakeholders the opportunity to collaborate further on pro-patient solutions,” according to a spokesperson. “Any patient having issues obtaining or affording a [Bristol Myers Squibb] medicine should visit our patient support website.”

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It is the second company in a month to announce 340B restrictions, joining AbbVie, which announced a similar program Dec. 29 that starts Feb. 1.

So far, 12 drug companies including Bristol Myers Squibb have announced 340B changes, saying the restrictions are necessary to prevent duplicative discounts provided for both Medicaid and 340B drugs.

Covered 340B entities such as safety net hospitals and community health centers rely on contract pharmacies to dispense discounted products to patients, but the drugmakers claim that the use of such facilities has exploded and that the discounts aren't benefiting patients. Advocates for the program say the discounts are vital to keeping afloat safety net providers that operate on thin margins.

The latest moves by the companies show the pharmaceutical industry is not deterred by an intense legal battle between the Biden administration and five drug makers who have made similar restrictions.

Last year the Health Resources and Services Administration announced its intention to fine six drugmakers—Eli Lilly, Novartis, Novo Nordisk, United Therapeutics, AstraZeneca and Sanofi—for similar restrictions made in 2020.

But five of the drugmakers sued the federal government in three separate lawsuits charging that they did have the authority under the 340B statute to impose such restrictions.

The Biden administration received favorable rulings in two of the lawsuits, but a judge ruled in the third that drugmakers could impose the restrictions. The administration is appealing that ruling.

The 340B advocacy group 340B Health was livid with Bristol Myers Squibb’s decision and wants the federal government to step in.

“The company’s actions fly in the face of those warnings, and we are calling on the government to use all its enforcement powers to put a halt to these harmful policies,” said CEO and President Maureen Testoni.