Bristol Myers Squibb became the latest large drugmaker to sue the federal government over a plan to change how it doles out drug discounts to hospitals.
Johnson & Johnson and Eli Lilly both filed lawsuits last month against the Health Resources and Services Administration (HRSA) and the Department of Health and Human Services (HHS) for blocking the implementation of its new 340B rebate model.
Bristol Myers filed its lawsuit in U.S. District Court for the District of Columbia and challenges HRSA’s determination that BMS’s intended rebate model would be inconsistent with the 340B statute and requires HHS’s pre-approval prior to implementation.
“BMS fundamentally supports the original intent of the 340B program, which is to serve uninsured, low-income patients. The rebate model we proposed will ensure 340B program compliance, enable more transparent data sharing and reduce duplicate discounting,” the pharma company said in a statement on its website.
“BMS will provide expedited payments to covered entities that choose to lower out-of-pocket costs for uninsured and vulnerable patients. We will continue to advocate for an environment that supports patient access to our medicines while ensuring 340B program integrity,” the company said.
The 32-year-old 340B program was enacted by Congress to help subsidize safety-net care providers by providing manufacturer discounts on outpatient drugs.
BMS informed HHS on October 22 that it intended to shift away from a discount model and toward a rebate model. “BMS’s intended rebate model is authorized by the 340B statute and accords with HHS practice endorsing the AIDS Drug Assistance Program (ADAP) rebate model as well as the ‘replenishment’ model overwhelmingly used by covered
entities,” the company said in its complaint.
To start, BMS said it intended to implement the model exclusively as to its Eliquis blood thinner product starting in the spring of 2025. HHS rejected BMS’s intended 340B rebate model in early November saying the proposal would be inconsistent with the statutory requirements for the 340B Program, which requires approval of a rebate model such as BMS has proposed.
BMS claims HHS’ decision was “unlawful three times over.”
The drugmaker claims the lack of transparency in the 340B program has driven “widespread abuse.”
“Many covered entities and their business partners, such as large retail pharmacy chains, have profited from the program without lowering costs to patients. We anticipate the implementation of the Inflation Reduction Act’s ‘Maximum Fair Price’ (MFP) will only exacerbate abuse by introducing an additional opportunity for unlawful duplication of the 340B price and the MFP,” BMS said in its statement.
In its lawsuit, BMS is asking the court to set aside HHS’ disapproval of BMS’ rebate model and allow the company to move forward with the new discount plan.
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