Eli Lilly and Company announced on Monday that it will end 340B discount pricing for hospitals that are not complying with the revised claims submission policy it implemented earlier this year.
"A minority of entities -- led by the country's largest and best-resourced hospitals and organized through their trade associations -- continues to refuse to submit data and are recycling the same pretextual objections," the company wrote in a letter to Thomas Engels, the administrator of the Health Resources and Services Administration, which oversees the program.
The federal 340B Drug Pricing Program requires drug manufacturers participating in Medicaid to sell outpatient drugs at steeply discounted prices to eligible safety-net providers. The revised Eli Lilly policy requires claims-level data for all pharmacy and medical drugs that are dispensed, including in-house and contract pharmacies.
About 70% of 340B participants have complied, the company said in its letter, adding that it has sent two follow-up letters to the approximately 1,000 covered entities that have not. Those that don't provide the requested data will lose their 340B pricing eligibility on June 8.
"Lilly is collecting claims data to stop the rampant fraud, waste and abuse in the 340B program that is harming employers, state and federal governments, and patients," the company said in statement shared with Becker's Hospital Review. "Covered entities have had more than three months to submit the data, but some large hospitals have coordinated a boycott, fighting transparency at all costs. We announced the requirement before it took effect, sent multiple reminders and have reached out individually to entities to discuss -- all without success."
The announcement has triggered a war of words with the American Hospital Association.
"Eli Lilly will soon take the extraordinary step of denying 340B discounts under its unlawful claims data policy," President and CEO Rick Pollack said. "This decision will undoubtedly harm America's most vulnerable patients and communities, forcing hospitals to divert resources away from care and toward onerous and expensive administrative burdens."
Pollack would like to see the U.S. Department of Health and Human Services intervene.
"For months, HHS has done nothing as Lilly threatened to take these illegal actions," he said. "With today's announcement, HHS can no longer sit on the sidelines. This administration has repeatedly shown that it is willing to be tough on drug companies to protect America's patients from profiteering and price gouging. On behalf of the hospitals and health systems that serve America's rural and most underserved communities, we ask HHS to show that same toughness here and prevent Lilly from moving forward with this illegal and harmful policy."
Lilly countered that the widespread compliance with its policy undercuts the association's claims.
"Hospital groups have fought every recent transparency measure in the 340B program, because transparency would expose hospitals' abuse of a program meant to help vulnerable patients," a spokesperson told Fierce Healthcare.
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