Eli Lilly has started withholding 340B discounts from hospitals that don’t submit claims data, as it had threatened to do. The American Hospital Association is asking Congress to intervene and demand that the Department of Health and Human Services take a stand on the issue.
Rick Pollack, president and CEO of the American Hospital Association, said in a statement that “AHA can confirm that Eli Lilly has taken the extraordinary action of denying 340B discounts.”
Congress is being asked to use its oversight authority to demand HHS take a position on drug companies’ attempts to require burdensome claims-data demands, according to Pollack. However, for months, HHS has done nothing, he said in an earlier statement.
Lilly first released its claims policy on February 1. The policy applies to all 340B drugs, including those dispensed through in-house pharmacies.
The AHA and the Association of American Medical Colleges have called Lilly’s policy illegal. On June 1, Eli Lilly sent a letter to Health Resources and Services Administration Administrator Thomas Engels stating that it would withhold 340B pricing to covered entities that refuse to comply with its in-house pharmacy claims data collection requirements.
Pollack claims that the manufacturer-imposed requirements drain resources from 340B hospitals and threaten patients’ access to lifesaving drugs. He said that “HRSA and HHS cannot continue to stand by while Eli Lilly and others rewrite the rules for their own benefit and skirt their obligations.”
Related: Corewell Health Expands in Southwest Michigan
According to the Association of American Medical Colleges, a total of nine drug manufacturers now require 340B-covered entities to report in-house pharmacy claims data, with some exemptions for covered entities in states that have 340B-related laws in place.
The AAMC had previously urged HRSA to communicate to drug manufacturers that their actions go against the 340B statute. Last year, a federal court rejected a lawsuit by several drugmakers that sought to change the 340B Drug Pricing Program from an up-front payment model to a backend rebate structure.
On June 2, Pollack said that “Make no mistake: Lilly did not, as it states, take this step ‘reluctantly’ or work ‘tirelessly’ to resolve ‘legitimate concerns’ about its unlawful policy. After all, just two weeks ago, AHA sent a letter to Lilly offering to work together in good faith on a common solution. Lilly never responded.”
The American Hospital Association is continuing to push for Congress to intervene in the dispute. It’s unclear what action, if any, HHS will take in response to the situation. For now, hospitals that don’t submit claims data to Eli Lilly will not receive 340B discounts on the company’s drugs.
The Department of Health and Human Services has not yet commented on the situation. The 340B program is administered by the Health Resources and Services Administration, which is part of HHS, and also relates to information blocking rule issues.