J&J to impose new limits on 340B access after industry court win

One pharma giant is implementing some major restrictions on access to 340B drugs, which go into effect next month.

Johnson & Johnson announced last week that it is updating its 340B policy effective Mar. 7, which will include restricting non-grantee covered entities to only one contract pharmacy to dispense outpatient drugs covered under 340B. The policy, which includes whether the approved health centers and hospitals have an in-house pharmacy or not, set the conditions that they must provide limited claims data, and that the one contract pharmacy must be within 40 miles of the approved health care entity’s parent site.

“We believe that this policy will help to reduce diversion and inappropriate claims for discounts and rebates,” J&J’s statement says.

The 340B program allows a few select hospitals and other providers that serve low-income patients to buy prescription drugs at massive discounts — and then in turn use the savings to help cover other costs.

J&J’s policy change impacts more than two dozen of the giant’s drugs, including blockbusters such as Stelara and Tremfya.

The update comes after the US Court of Appeals for the Third Circuit handed three pharmas — AstraZeneca, Novo Nordisk and Sanofi — a favorable win earlier this year over 340B. The court ruled that companies cannot be forced to provide 340B-discounted drugs purchased by hospitals from an unlimited number of community and specialty pharmacies.

From the decision:

Drug makers often comply by limiting distribution to a few pharmacies that are specially trained to educate and monitor patients. The government now says that such limits are illegal under Section 340B. Perhaps there is a costly, complex way to comply with both requirements, but this tension is another strike against the government’s reading.

Maureen Testoni

Maureen Testoni, CEO and president of hospital association 340B Health, said in a statement that the pharma giant’s limits on 340B drugs are more restricting than those that the appeals court determined — calling its changes a “massive escalation” of the harm that J&J is causing to the healthcare safety net.

A J&J spokesperson told Endpoints News that the Big Pharma is “committed to the 340B Program as it was originally intended.” J&J called what it was implementing “reasonable safeguards” in a bid to limit abuse of the program, such as duplicate discounts and diversion of discounts that “could undermine the long-term sustainability” of 340B.

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