Following calls by America’s Essential Hospitals for federal action, warnings from a regulatory agency, and congressional scrutiny, Johnson & Johnson (J&J) has withdrawn its plan to offer rebates rather than up-front discounts for two drugs in the 340B Drug Pricing Program.
On Sept. 30, J&J responded to repeated demands by the Health Resources and Services Administration (HRSA), saying it would halt a plan to offer rebates under the 340B program for Stelara and Xarelto. However, in its letter to HRSA, J&J maintained its position that the rebate model was legal and criticized HRSA’s stance against the plan.
On Aug. 23, J&J announced its plan to move to a rebate model on Oct. 15. Soon after, America’s Essential Hospitals sent HRSA a letter denouncing the rebate plan and calling on the agency to use “all available tools” to stop it, including excluding the manufacturer from Medicare and Medicaid. In a Sept. 17 letter to J&J, HRSA warned of this consequence by saying the company’s rebate plan put its federal pharmaceutical pricing agreement (PPA) at risk. HRSA also said J&J could face civil monetary penalties.
HRSA ordered J&J to inform the agency by Sept. 30 of its intention to comply with HRSA’s demands. In a second public notice, published Sept. 27, HRSA notified J&J that the agency was prepared to move forward with rescinding the PPA on Oct. 1, which would prohibit J&J from accessing the Medicare Part B and the Medicaid markets.
America’s Essential Hospitals also actively helped to gain congressional support for a letter circulated in the House of Representatives that resulted in nearly 200 House members calling on Health and Human Services Secretary Xavier Becerra to stop the J&J rebate plan.
Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions
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