CVS scraps plan to cut payments to 340B providers

CVS Pharmacy
340B hosptials cheered CVS' announcement that it would scrap plans to cut payments to participating pharmacies. (Getty/Serenethos)

CVS Caremark has put the brakes on a plan to cut payments to 340B providers. 

CVS Caremark issued two amendments to its provider manual in November, one of which would potentially deny pharmacies that contract with 340B providers rebates for drugs in the program, as it would not be considered a retail purchase. 

In January, CVS delayed those changes to April 1. However, a corporate spokesperson confirmed to FierceHealthcare that the plans have been scrapped altogether. 

Free Daily Newsletter

Like this story? Subscribe to FierceHealthcare!

The healthcare sector remains in flux as policy, regulation, technology and trends shape the market. FierceHealthcare subscribers rely on our suite of newsletters as their must-read source for the latest news, analysis and data impacting their world. Sign up today to get healthcare news and updates delivered to your inbox and read on the go.

CVS Caremark is “in the process of notifying the pharmacies that would have been affected by the changes,” the spokesperson said. 

RELATED: CVS Caremark shifts PBM model to 100% pass-through pricing and focus on net cost 

That CVS was backpedaling on the plan was first reported by Modern Healthcare, which obtained a copy of an internal memo sent earlier this week that said pushback from 340B pharmacies led the company to change its mind. 

“Many pharmacies reached out and engaged us in very good conversations,” the memo said. 

340B providers cheered the decision. In a statement, Maureen Testoni, CEO of 340B Health, which represents more than 1,300 providers in the program, said the group was “very pleased.” 

The discounts through the 340B program help hospitals provide care to patients who have “nowhere else to turn,” she said. 

“This is a welcome change, and our members appreciate the fact that CVS Caremark listened to their concerns and responded appropriately,” Testoni said. 

340B hospitals also scored a significant win in December, when a federal judge ruled that the Department of Health and Human Services overstepped its legal authority in significantly cutting payments to the program. 

Suggested Articles

Civica Rx, the non-profit drug company formed by a collection of hospitals to help control generic drug supplies and prices, is putting down roots.

ONC is moving another step closer to implementing a framework designed to improve data sharing between health information networks.

Welcome news to many health IT stakeholders: HHS announced Friday that it is extending the comment period for two proposed interoperability rules.