340B Program Developments
by Elizabeth “Issie” Karan, Legal Counsel

On March 11, 2022, the U.S. District Court for the District of Delaware ruled that the Biden administration exceeded its legal authority when it used a letter to demand AstraZeneca honor discounts provided through the 340B program to contract pharmacies. The move marks a blow to the Biden administration, which had relied on letters to push drugmakers to resume providing discounts to 340B covered entities with contract pharmacies. The decision vacates the letter and remands to the HHS for further consideration and marks the latest development in an ongoing saga over the 340B program

AstraZeneca, along with more than a dozen other manufacturers, has been limiting shipments of discounted products to contract pharmacies. Hemophilia Treatment Centers (HTCs) have been able to circumvent many of these restrictions. However, please keep reading to learn more about concerning developments from Gilead.

HTCs may be impacted by forthcoming changes to Gilead’s contract pharmacy operations. In a letter dated March 15, 2022, Gilead announced a request that all 340B covered entities provide claims level data for prescriptions of Gilead’s branded hepatitis C products dispensed from contract pharmacies, as of May 2, 2022. This policy includes data for prescriptions of Epclusa® (sofosbuvir / velpatasvir), Harvoni® (ledipasvir/sofosbuvir), Sovaldi® (sofosbuvir) and Vosevi® (sofosbuvir/velpatasvir/voxilaprevir) (although the program does not apply to authorized generics of Epclusa® and Harvoni® offered by their subsidiary, Asegua Therapeutics).

In the letter, Gilead stated that covered entities that provide claims level data will be able to continue to use the contract pharmacies of their choice. If covered entities decide not to participate and do not have an in-house pharmacy, they will have the option to select a single contract pharmacy location. The letter further indicates that, after May 2, 2022, covered entities that elect not to participate will no longer be eligible for bill to / ship to orders of 340B-priced HCV drugs for contract pharmacies.

The Alliance is deeply concerned about this overreaching and unwarranted intrusion into the physician-patient relationship. HTCs should respond to targeted requests from manufacturers for 340B transaction information that relate directly to your compliance. However, inquiries should provide the recipient with details on the specific claims for which additional information is being requested and explain why these claims implicate compliance with the 340B statute’s prohibition on duplicate discounts and/or diversion.

The Alliance also is concerned about the potential for Health Insurance Portability and Accountability Act (HIPAA) non-compliance and the unnecessary, administrative burdens created by submission of data to a third-party vendor without any relationship to patients. The third-party vendor selected by Gilead promises to deidentify data submissions. However, the third-party vendor’s “Terms of Use” acknowledge that protected health information could be submitted inadvertently and assumes no responsibility for any such error. Additionally, submission of data by covered entities’ staff reduces valuable time for patient care from patient populations who need it most.

The Alliance is reaching out to Gilead to request an exception to this policy for HTCs (see here for a letter we sent to Gilead on the issue) and will share an update as we have it. Please contact our team if you need assistance with this issue.