J&J Withdraws 340B Rebate Plan After ASHP and Partner Advocacy

Today, Johnson & Johnson (J&J) informed 340B covered entities that it would not proceed with the implementation of its plan to convert 340B discounts to a rebate model.

Last week, after advocacy pressure from ASHP and our partner organizations, the Health Resources and Services Administration (HRSA) advised 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.

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. Nearly 190 members of Congress 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.