HRSA Pushes Back on J&J Rebate Plan

Today, the Health Resources and Services Administration (HRSA) advised Johnson & Johnson (J&J) that it faces significant consequences should it move forward with its plan to unilaterally convert up-front 340B Drug Pricing Program discounts for disproportionate share hospitals to a rebate program for two drugs, Stelara and Xarelto. HRSA warned J&J that it faces termination of its 340B agreement, rendering all J&J drugs ineligible for Medicare Part B and Medicaid coverage.

Today’s letter follows a previous cease-and-desist letter from HRSA to J&J, which was sent after ASHP and our partner organizations raised concerns about the J&J rebate plan.

ASHP has continued aggressively advocating against the J&J plan, using this year’s Legislative Day to ask members of Congress to sign on to a letter directing the Department of Health and Human Services to take more aggressive action against J&J. To date, over 180 members of Congress have signed that letter.

ASHP also raised our serious concerns about the J&J plan at a recent Centers for Medicare & Medicaid Services meeting, where we underscored that this action would both undercut the 340B program and dilute the value of the Inflation Reduction Act negotiated pricing framework, seriously harming hospitals and the patients they serve.

“We applaud HRSA for taking a strong stance against manufacturer attempts to undercut the 340B program,” said Tom Kraus, ASHP vice president of government relations. “We urge HRSA to implement the strongest possible sanctions to deter other manufacturers from attempting to unilaterally change 340B program requirements and putting hospitals and their patients at risk.”

ASHP will update members about HRSA’s actions on this issue and our ongoing advocacy efforts to protect the 340B program.