In a Letter Sent to the Administration, the Congresswoman & Her Colleagues Demanded Action in Response to Illegal Actions that are Increasing Prescription Drug Costs, Reducing Access to Affordable Medications for Seniors, and Threatening the Stability of America’s Rural Hospitals & Clinics
WASHINGTON, D.C. — U.S. Representative Abigail Spanberger led a bipartisan effort with 180 of her colleagues in pressing the Biden Administration to prevent reckless prescription drug cost hikes and defend the 340B Drug Pricing Program in the face of illegal actions from several pharmaceutical companies.
The 340B Drug Pricing Program requires that pharmaceutical companies give safety-net and rural healthcare providers discounts on their drugs — in exchange for Medicaid covering their drugs. The program has a longstanding record of keeping drug costs low for U.S. patients who are low-income, live in rural communities, or suffer from serious chronic illnesses. This year marks the 30th anniversary of this successful program.
But in recent years, 17 drug manufacturers have now stopped honoring 340B discounts for drugs dispensed through pharmacies that contracted with 340B providers — dramatically increasing the price of those drugs for vulnerable patients and healthcare providers.
In a letter sent to HHS Secretary Xavier Becerra, Spanberger and 180 of her colleagues in the U.S. House called on HHS to penalize drug manufacturers that refuse to comply with their 340B obligations under law. Additionally, they emphasized how recent changes have negatively impacted patients, pharmacists, and healthcare providers across the country. Spanberger led the letter alongside U.S. Representatives Cindy Axne (D-IA-03), Doris Matsui (D-CA-06), David McKinley (R-WV-01), Dusty Johnson (R-SD-AL), and John Katko (R-NY-24).
“We urge the Department of Health and Human Services (HHS) and its Office of the Inspector General (OIG) to use current statutory authority to impose civil monetary penalties against all drug manufacturers who have unlawfully overcharged safety net health care providers,” said Spanberger and her colleagues. “Manufacturers have received multiple warnings that their overcharges are unlawful, but still refuse to comply. Further delay of enforcement actions emboldens more manufacturers to begin overcharging safety net providers, threatening the integrity of the entire 340B program.”
Their letter continued, “We urge OIG to conclude its review of the seven referrals as soon as possible and begin imposing civil monetary penalties against manufacturers it finds in violation of the law. We also request HHS initiate enforcement actions against the remaining eleven drug companies that have implemented overcharge policies but have not yet been referred to the OIG. These actions are essential to bringing manufacturers back into compliance with their responsibilities under the statute and will deter other manufacturers from pursuing similar unlawful courses of action. Every day that drug manufacturers violate their obligation to provide these discounted drugs, vulnerable communities, federal grantees, and safety net health care providers are deprived of resources Congress intended to provide.”
WHAT THEY’RE SAYING
“The Virginia Community Healthcare Association and its member health centers are so grateful to Representative Spanberger for her leadership on protecting the integrity of the 340B program,” said Tracy Douglas, CEO, Virginia Community Healthcare Association. “We are also grateful to the eight Representatives from the Commonwealth of Virginia who have joined her by lending their bi-partisan support. The community health centers offer quality healthcare to those who need it most, and that care includes medicines that both make them well and keep them alive. The thought that pharmaceutical companies are trying to roll back legally protected discounts by any means necessary is unfathomable. It is fortunate that these members of congress who understand the value of our health centers are here to protect those we serve.”
“VRHA greatly appreciate Representative Spanberger’s hard work in this area,” said Beth O’Connor, Executive Director, Virginia Rural Health Association; President, National Rural Health Association. “The 340B program is essential to assure that rural providers are financially stable and can keep their doors open to continue to serve their communities.”
“The AHA thanks this bipartisan group of representatives for their continued efforts to protect the 340B program and the vulnerable communities across the country it benefits,” said Lisa Kidder Hrobsky, Senior Vice President, Federal Relations, Advocacy, and Political Affairs, American Hospital Association (AHA). “We echo this call for HHS to take swift and decisive action to halt these harmful tactics from drug companies and ensure that 340B drugs remain available and accessible to patients who rely on them.”
“On behalf of the nation’s 1,400 health centers and the nearly 29 million patients they serve, I want to thank Reps. Spanberger, McKinley, Axne, Johnson, Matsui, and Katko for their leadership on this critical issue,” said Rachel Gonzales-Hanson, Interim President & CEO, National Association of Community Health Centers. “The 340B program is a lifeline for Community Health Centers, but drug companies are looking to maximize profit by restricting access to vital medications at the expense of patients. A recent survey found that nearly 90% of health center leaders believe that at least 10% of their patients would go without needed medications if they did not have access to 340B discounted medications. Health centers appreciate efforts by Congress and the Biden administration to hold these drug companies accountable.”
“We strongly applaud Reps. Spanberger and McKinley, two longtime 340B champions, for stepping up to protect safety-net providers from unlawful attempts to weaken the program,” said Maureen Testoni, CEO & President, 340B Health. “We thank all the members of Congress who are part of this bipartisan call for strong and swift enforcement actions against the drug companies that are refusing to restore required 340B discounts to hospitals. HHS should impose steep financial penalties on all the companies that are ignoring their legal commitments to the health care safety net. This unlawful behavior is harming patient care, and it must stop.”
“Community Voices for 340B (CV340B) is proud to support Reps. Spanberger, McKinley, Matsui, Johnson, Axne, Katko, and hundreds of members of Congress who are defending the 340B program and communities it serves by asking for immediate action to thwart drug company attacks on the program. We strongly agree that Congress and regulators, not the drug companies, should be overseeing and regulating the 340B program,” said George Puckett, President, Community Voices for 340B (CV340B).
“Drug companies’ illegal actions are making drugs more expensive for the most vulnerable patients and hurting the safety net providers these people need,” said Bruce Siegel, MD, MPH, President & CEO, America’s Essential Hospitals. “We thank these 181 lawmakers for defending the 340B program and join them in calling on HHS and OIG to hold drug companies accountable for these illegal actions, which are especially egregious as communities continue to suffer the economic and health consequences of COVID-19.”
“Unfortunately, despite previous attempts by Congress and the administration to hold manufacturers accountable, there has been an increase in restricting access to the 340B Drug Pricing Program. Further action is needed to help ensure that providers, communities and patients can continue to access this program’s critical resources,” said Shoshana Krilow, Senior Vice President, Public Policy & Government Relations, Vizient. “We are grateful to Reps. Spanberger, McKinley, Matsui, Johnson, Axne, Katko and more than 150 of their colleagues, who have urged the administration to begin enforcement actions against drug companies that refuse to honor 340B discounts, and look forward to working together on additional efforts to protect the integrity of the 340B Drug Pricing Program.”
“Very simply, 18 drug companies are holding America’s 340B safety net hostage. Their proposed ransom? Shrinking the 340B program, so they make more money. Our patients deserve far better,” said Shannon Stephenson, President, Ryan White Clinics for 340B Access (RWC-340B); CEO, Cempa Community Care, Chattanooga, Tennessee. “We stand in strong support of our tireless Congressional champions – Reps. Spanberger, McKinley, Matsui, Johnson, Axne, Katko, and many others are again imploring HHS to take immediate action to sanction these drug companies that limit access to 340B drugs for the patients we serve; in clear violation of the law.”
“Our 340B hospitals, health centers, and clinics are being deprived of resources Congress intended them to have to better serve their patients and communities,” said Lisa Scholz, PharmD, MBA, FACHE, Senior Vice President, Industry Relations, The Craneware Group. “On behalf of Sentry Data Systems, now part of The Craneware Group, we appreciate Congress’ continuing leadership and bipartisan efforts to ensure that drug companies honor their obligations to provide needed prescription drug discounts to our nation’s safety-net facilities.”
“I applaud Reps. Spanberger, McKinley, Matsui, Johnson, Axne, and Katko for continuing to shine a light on how drug manufacturers’ actions are harming our nation’s most underserved people,” said Bob Marsalli, CEO, Washington Association of Community Health. “By restricting Community Health Centers’ ability to dispense 340B drugs via contract pharmacies, these manufacturers are limiting patients’ access to affordable medications, and undermining CHCs’ ability to provide these patients with a range of other health care services.”
Click here to read the letter, and the full letter text is below.
Dear Secretary Becerra,
As leading supporters of the 340B drug pricing program, we urge you to take quick action to protect the integrity of the program and ensure its benefits reach providers and their vulnerable patients, as Congress intended.
Specifically, we urge the Department of Health and Human Services (HHS) and its Office of the Inspector General (OIG) to use current statutory authority to impose civil monetary penalties against all drug manufacturers who have unlawfully overcharged safety net health care providers. Manufacturers have received multiple warnings that their overcharges are unlawful, but still refuse to comply. Further delay of enforcement actions emboldens more manufacturers to begin overcharging safety net providers, threatening the integrity of the entire 340B program.
In February 2021, a majority of the U.S. House of Representatives signed a letter urging HHS to act in response to six drug manufacturers’ refusal to honor 340B discounts on their products. Unfortunately, since we sent that letter more than a year ago, at least 12 more manufacturers have announced similar policies restricting access to the 340B program and overcharging providers. These companies’ actions have increased costs for federal grantees and other safety net providers and have reduced patient access to care in vulnerable communities.
We appreciate that HHS has taken steps to protect the 340B program. HHS sent warning letters to nine drug manufacturers and referred seven of those companies to the OIG to evaluate whether to impose civil monetary penalties. The OIG is authorized to impose civil monetary penalties against manufacturers that knowingly and intentionally overcharge 340B hospitals and health centers. However, more than eight months after receiving the first referrals, the OIG has yet to take any enforcement action and these manufacturers continue to unlawfully overcharge safety net providers.
Therefore, we urge OIG to conclude its review of the seven referrals as soon as possible and begin imposing civil monetary penalties against manufacturers it finds in violation of the law. We also request HHS initiate enforcement actions against the remaining eleven drug companies that have implemented overcharge policies but have not yet been referred to the OIG. These actions are essential to bringing manufacturers back into compliance with their responsibilities under the statute and will deter other manufacturers from pursuing similar unlawful courses of action.
Every day that drug manufacturers violate their obligation to provide these discounted drugs, vulnerable communities, federal grantees, and safety net health care providers are deprived of resources Congress intended to provide. Thank you for your prompt attention to this urgent matter.
Last month, Spanberger led a bipartisan group of her colleagues in speaking on the floor of the U.S. House in support of the federal 340B Drug Discount Program. During the special order hour led by Spanberger, Democrats and Republicans shared stories from their communities highlighting the importance of the 340B Program. Additionally, they outlined their opposition to illegal actions by the 17 pharmaceutical companies that are violating 340B laws — and thereby hiking prescription drugs costs for healthcare providers in rural and underserved communities. Click here to watch the full special order hour.
Even after warnings from HHS in 2021, companies in violation of 340B laws have made no effort to come into compliance with their lawful obligations — and HHS has not followed through with an enforcement action. This situation jeopardizes the integrity of the entire program and threatens affordable drug availability throughout rural America.
Earlier this year, Spanberger pressed the Biden administration take immediate action against drug manufacturers that refuse to comply with the 340B laws on the books. Additionally, the bipartisan letter called on HHS to protect rural providers’ access to discounted drugs.
And last year, Spanberger introduced the bipartisan Preserving Rules Ordered for the Entities Covered Through (PROTECT) 340B Act to prohibit insurers and Pharmacy Benefit Managers (PBMs) from discriminating against 340B providers or their contract pharmacies on the basis of their status as providers or pharmacies that dispense 340B drugs.