HRSA threatens J&J with sanctions over planned 340B rebate scheme
HRSA threatens J&J with sanctions over planned 340B rebate scheme
The U.S. Health Resources and Services Administration on Tuesday wrote a letter to Johnson & Johnson CEO Joaquin Duato, insisting that the pharma cease implementation of proposed modifications to its 340B drug discount policy.
If J&J refuses to comply, it will be in violation of its original obligations under the federal discount program for hospitals and will be open to “potential consequences,” according to the agency. These include the termination of J&J’s participation in the 340B program and other “civil monetary penalties.”
The pharma has until the end of the month to inform the Health Resources and Services Administration (HRSA) of its decision.
Tuesday’s warning from HRSA follows a previous announcement from J&J that it will implement sweeping changes to how it lowers drug costs under 340B. Instead of offering upfront discounts, the pharma plans to require participating hospitals to first purchase drugs at full price and then offer rebates later, subject to “validation.”
The 340B changes are slated to cover J&J’s blood thinner Xarelto (rivaroxaban) and blockbuster antibody Stelara (ustekinumab) and will go into effect on Oct. 15, 2024.
To qualify for rebates, hospitals should file their requests within 45 days of dispense and submit data related to the use and purchase of Xarelto and Stelara, according to the company. Rebates will be handed out “once the number of validated dispensed units equals the number of units in the purchased package size,” J&J noted at the time.
In its letter on Tuesday, HRSA slammed J&J’s “unapproved rebate proposal” noting that it “violates J&J’s obligations under the 340B statute.”
