The University of Washington School of Medicine is increasingly concerned about the future of its 340B discount, as more drug makers limit discounts on contract pharmacy dispensing.

“We’ve seen a significant erosion of our savings,” said Sumona DasGupta, assistant director of pharmacy audit and compliance. UW Medicine, which operates two 340B hospitals, lost about two-thirds of its contract pharmacy savings, she said.

Safety net providers across the country expect more lost savings from drugmakers’ restrictions on 340B discounts for contract pharmacies, as 16 drugmakers have announced limited discounts since summer 2020 despite ongoing litigation the plan of.

On Monday, Johnson & Johnson, one of the world’s largest drugmakers, became the latest drugmaker to limit 340B discounts for safety-net hospitals that work with contract pharmacies. The policy will go into effect on May 2.

“It’s really become Sumona telling me, ‘It’s Friday, which company is going to be on the list?'” said Steve Fijalka, chief pharmacy officer at UW Medicine.

Like other pharmaceutical companies, Johnson & Johnson Letter of March 21 Restrictions are necessary to reduce drug diversion and inappropriate claims for discounts and rebates. The Government Accountability Office released a report in 2018 saying federal regulation of contract pharmacies needed improvement.

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“We are committed to the original intent of the 340B program, but as the program has grown exponentially in recent years, we believe steps must be taken to reduce duplicate discounts and transfers in the system to ensure its long-term sustainability,” Janssen Public Affairs and Access Communications Chief Katie Upton said in an email.

But hospitals and other guaranteed safety net providers insist the discounts are queue up Comply with the law and necessary to keep patients’ access to medicines at a meager provider’s run. Discounts dispensed at contract pharmacies account for a quarter of the total hospital 340B savings and over 50% of the critical visit hospital savings.

A sort of polls A survey by lobby group 340B Health in late 2021 found that larger city 340B hospitals are losing 23 percent of their community pharmacy savings due to drug company restrictions. Ten percent of these hospitals reported losses of $9 million or more. Intensive hospital Reports lost an average of 39% of their savings.

Maureen Testoni, chief executive and president of 340B Health, said the number of companies restricting discounts had now doubled, and the overall impact could be “much bigger”.

“Our hospitals have been very concerned about this for a long time, obviously, but by the end of last year we started hearing real panic from some of our members and companies started announcing that they were going in the same direction,” Testoni Say.

The federal 340B program requires pharmaceutical companies participating in Medicaid or Medicare to discount products for safety net providers.But in 2020, the company started Limit discount Outpatient drugs, including prohibiting hospitals from using discounts at multiple contract pharmacies or requiring entities to submit important data to receive discounts. Some drugmakers have also imposed restrictions on community health centers and other 340B entities.

Department of Health and Human Services Say By the end of 2020, even if hospitals or other 340B entities use contract pharmacies to distribute the drugs, manufacturers must provide covered drugs at no more than 340B prices. HHS’s Health Resources and Services Agency established send a letter Manufacturers were told last year that their policies violated Regulation 340B and could be subject to fines.

The manufacturer is suing HHS, and federal judges are divided over whether the agency has acted within its scope. Both the government and the manufacturer have appealed the decisions.

Testoni said the impact of these discounts isn’t just made worse by the fact that more and more companies are imposing restrictions. This is also due to the specific drugs they restrict. Manufacturers are increasingly limiting 340B discounts on specialty drugs that can only be dispensed at contract pharmacies.

“Some of these drugs we can’t even provide ourselves,” said Das Gupta of the University of Wisconsin. “Patients are on medication, but we don’t have any 340B benefits to help coordinate that care, or in situations where patients may be getting unpaid care, we’re evaluating our ability to make sure we can continue to provide it.”

Loss of hospital savings could also affect patient care, said Shahid Zaman, policy manager at Essential Hospitals of America. He said contract pharmacies helped hospitals expand access because some patients were unable to go to the hospital’s in-house pharmacy to pick up their medicines.

In addition, member hospitals have used 340B savings to fund medical services such as trauma, oncology and stroke care; medication management; sexual assault response teams, and more. Administrative difficulties dealing with different 340B discount restrictions also plagued hospitals, Zaman said.

Five manufacturers have limited discounts to community health centers and hospitals, according to 340B Health.Drugmaker Gilead recently Announce Starting May 2, it will limit discounts on its popular hepatitis C drugs by requiring claims-level data on contract pharmacy prescriptions.

“Sharing claims-level data with manufacturers is a necessary step towards greater transparency of the 340B program, which will help Gilead address duplicate discounts and transfers, while strengthening the program’s integrity,” the company’s March 15 notice said. and sustainability.”

Thrive Alabama CEO Mary Elizabeth Marr said it’s hard to quantify how much savings her community health center will lose because of Gilead’s announcement, but the action represents a “slippery slope.”

“We built sustainable plans around that money. If the money ran out, we really wouldn’t exist,” Marr said.