The US’ Health Resources and Services Administration threatened Johnson & Johnson with fines for unilaterally reshaping the company’s involvement in the multibillion-dollar federal drug discount program known as 340B.
The Health Resources and Services Administration letter, which was sent this week, argues that the company’s rebate proposal would require certain hospitals to purchase J&J’s Stelara and Xarelto at full price, exceeding the discounted price, and would then force the hospitals to recoup the discounts via rebates. J&J’s plan is set to take effect on Oct. 15.
HRSA said it expects J&J to cease implementation of its rebate proposal immediately and to inform HRSA that it’s done so by Sept. 30.
In correspondence with HRSA, according to the letter, J&J asserted that their proposed model is similar to “replenishment” processes that are allowed under the program. But HRSA called that interpretation incorrect.
J&J has described the 340B program as ballooning in size, “rife with arbitrage, opportunism and opacity that benefits large for-profit entities at patients’ expense.”
When asked if the company’s spat with HRSA would end in a legal fight, a spokesperson said via email that “J&J is committed to the 340B program as it was originally intended to serve as an important safety net program for vulnerable patients.” The company said it would “continue to constructively engage” with the agency.