Teva joins fellow pharma companies in restricting drug discount program

Teva is the latest in a long list of drugmakers placing restrictions around the federal 340B program which provides discounted drugs for low-income Americans.

According to a letter acquired by the nonprofit 340B Health, Teva announced Thursday that starting July 5, covered hospitals with in-house outpatient pharmacies will no longer be eligible to have 340B-discounted medicines shipped to contract pharmacies. Endpoints News has confirmed the content of the letter with Teva.

“Teva has grown concerned with participation of for-profit entities and the increases in diversion of 340B purchased medicines and duplicate discounts that has accompanied growth in contract pharmacy arrangements,” the company said in an emailed statement on Friday, adding that it believes the move “will not reduce patient access to Teva medicines under the 340B program.”

Covered hospitals that do not have an in-house pharmacy capable of dispensing the drugs will be able to designate a single contract pharmacy location, which must be done by June 18 in order to take effect by July 5.

“All federal grantee covered entities are exempt from this policy and may continue to obtain 340B pricing through an unlimited number of contract pharmacies and are not required to submit claims data,” the letter states.

The 340B program allows safety-net hospitals to buy outpatient drugs at a discount, stretching “scarce federal resources as far as possible,” according to the Health Resources and Services Administration. However, drugmakers have argued that the program is being abused by hospitals.

Teva joins a string of drugmakers that have imposed 340B restrictions, including J&J which announced policy changes earlier this year that it claimed would “help to reduce diversion and inappropriate claims for discounts and rebates.” Bristol Myers Squibb, AbbVie, AstraZeneca and Pfizer are among the others to adopt restrictions.

Maureen Testoni

Earlier this year, the Alliance to Save America’s 340B Program (ASAP 340B), made up of a coalition of biopharma stakeholders, said it would lobby for legislative changes to the program, including new hospital eligibility criteria. 340B Health, which is made up of more than 1,500 hospitals and health systems, has decried the recommendations, arguing that they would limit access.

“The price of Teva’s decision will be measured in the harm it causes patients in need who rely on access to these lifesaving medications and all those who rely on safety-net care,” 340B Health president and CEO Maureen Testoni said in a statement on Friday. “Two federal appeals courts are considering lawsuits involving such drugmaker restrictions, and we urge the Biden administration to continue its strong defense of its interpretation of the 340B law.”

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