The Health Resources and Services Administration (HRSA) on Dec. 12 demanded that pharmaceutical manufacturer Sanofi cease implementation of its proposed 340B Drug Pricing Program rebate proposal. The action follows a Dec. 2 letter from America’s Essential Hospitals urging HRSA “to take immediate action” against Sanofi to protect the 340B program from illegal rebate schemes.
HRSA gives Sanofi until Dec. 20 to comply and notify covered entities that the rebate proposal will not move forward. If Sanofi fails to comply with HRSA’s demands, HRSA states it will suspend the manufacturer’s pharmaceutical pricing arrangement (PPA), which is required for a manufacturer’s products to be covered by Medicaid and Medicare Part B. HRSA states that unilaterally implementing a rebate proposal without secretarial approval would violate the 340B statute.
Sanofi announced the proposed rebate model in a Nov. 22 notice to 340B covered entities, detailing a wide-reaching scheme to require multiple covered entity types — critical access hospitals, disproportionate share hospitals, rural referral centers, sole community hospitals, and consolidated health centers — to submit 340B claims through a third-party platform, Beacon. If implemented, the model would take effect on Jan. 6, 2025.
When pharmaceutical manufacturer Johnson & Johnson proposed a similar model in August, HRSA also threatened to suspend that manufacturer’s PPA. Johnson & Johnson ultimately complied with HRSA’s demand and now joins manufacturers Eli Lilly and Bristol-Myers Squibb in separate suits to demand the courts authorize their models.
Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.
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