Spanberger Statement on Johnson & Johnson Suspending Plan to Stop Direct Drug Discounts for Hospitals in Underserved Communities

Congresswoman: “This Blatant Violation of the Law Would Have Hurt Patients Served by Hospitals that Rely on 340B to Afford Their Prescription Medications”

WASHINGTON, D.C. — U.S. Representative Abigail Spanberger today released the following statement after Johnson & Johnson (J&J) suspended the company’s plan to transition two lifesaving drugs currently available at a direct discount under the 340B Drug Pricing Program to an unapproved rebate model.

“The 340B program — which was created by Congress to serve vulnerable patients — plays a critical role in lowering prescription drug costs for safety net and rural healthcare providers. Unfortunately, Johnson & Johnson was attempting to upend decades of established law by eliminating direct discounts available to healthcare providers for two lifesaving prescription drugs.

“This blatant violation of the law would have hurt patients served by providers that rely on the 340B program to afford certain prescription medications. I led a bipartisan group of 188 of my colleagues last week in standing up for these providers and the communities they serve and urging the Biden Administration to pursue all available enforcement actions if J&J were to put its plan in place. Today, I was glad to see the company make the wise decision to suspend its rebate proposal and continue to honor direct discounts — and allow the 340B program to continue to serve Virginians and Americans across our country, as originally intended.”

BACKGROUND

On Friday, Spanberger led a group of 188 Democrats and Republicans in urging the U.S. Department of Health and Human Services (HHS) to act swiftly to prevent significant financial challenges and administrative burdens for safety-net hospitals and patients in the event that J&J followed through on its plan to violate the 340B statute and transition to a rebate model.

The 340B Drug Pricing Program was enacted by Congress in 1992 with bipartisan support and is overseen by HHS. The program requires that pharmaceutical companies give safety-net and rural healthcare providers discounts on their drugs, in exchange for having their drugs covered by Medicaid.

The program has a demonstrated record of protecting patients who are low-income, live in underserved communities, or suffer from serious chronic illnesses from the threat of skyrocketing prices for the drugs they depend on the most.

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