Bausch Health became the 18th drugmaker to impose restrictions on sales to 340B contract pharmacies despite an ongoing legal battle other companies have faced.
The drugmaker announced last week that it will start on Aug. 1 cutting sales of products discounted under the 340B program to a covered entities’ contract pharmacy. Bausch’s decision is the latest by a drugmaker to shrug off the prospect of federal fines for the actions.
Bausch Health is the 18th drug company that has imposed restrictions on 340B sales to contract pharmacies, which are third-party entities that dispense drugs on a covered entity’s behalf. So far, the federal government has warned nine of the manufacturers over the moves and referred seven of them to the Department of Justice for potential fines.
However, several drug companies have sued the federal government arguing that they do not have to provide discounts to contract pharmacies based on the 340B statute. The various lawsuits continue to make their way through the courts, with some ruling in favor initially for the government and others for drug companies.
In the 340B program, drugmakers agree to give discounts on products to safety-net providers in exchange for participation in Medicare and Medicaid.
The pharmaceutical industry has complained that the use of contract pharmacies has exploded in recent years and believe that patients are not benefitting from the discounts. Safety-net providers and 340B advocates counter that the discounts have helped improve care for patients and help facilities that operate on thin margins deal with increasing drug prices.
Bausch Health told Fierce Healthcare that any covered entity which doesn't have an in-house pharmacy can rely on one contract pharmacy to be exempt from the policy.
"We believe this decision will preserve the integrity of the program and help ensure our 340B prices directly assist more low-income Americans," the drugmaker said.
340B advocates blasted Bausch’s latest move.
“By ignoring their legal agreements to offer discounted pricing on outpatient drugs sold to 340B hospitals, health centers and clinics, companies such as Bausch Health are threatening crucial healthcare for patients with low incomes and those living in rural communities who rely on these providers for care,” said Maureen Testoni, 340B Health president and CEO, in a statement.
The Health Resources and Services Administration is continuing to go after drug companies that cut off sales despite the lingering legal battle. The agency sent a letter to drugmaker UCB on June 27 over similar moves and that if the drugmaker doesn’t stop it could face fines.