America’s Essential Hospitals has urged the Health Resources and Services Administration (HRSA) to “use all available tools” to prevent Johnson & Johnson (J&J) from providing 340B price reductions on select drugs as rebates rather than up-front discounts.
On Aug. 23, J&J announced it would transition from point-of-sale discounts to post-dispensing rebates for Stelara and Xarelto under the 340B Drug Pricing Program. The drug maker said it would implement the change on Oct. 15, 2024.
In a statement to the media, HRSA quickly responded to the proposed changes, calling the unilateral decision “inconsistent” with federal law and saying it has not approved J&J’s rebate model. The agency said it had shared this with J&J and will take “appropriate actions as warranted.”
The association’s letter to HRSA urged the administration to take additional actions to stop J&J and other manufacturers from withholding up-front 340B discounts. The letter also highlighted the negative consequences of the proposed rebate model for patients and essential hospitals.
The two drugs included in J&J’s proposed rebate model, Stelara and Xarelto, are high-cost drugs with 2023 list prices greater than $13,800 and $500, respectively, for a 30-day supply. The two products are among 10 the Centers for Medicare & Medicaid Services selected to negotiate pricing under new authority granted by the Inflation Reduction Act.
Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.
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