ASHP Calls on CMS to Change Course on IRA Rebates, Protect 340B Discounts

Today ASHP and other pharmacy organizations met with Centers for Medicare & Medicaid Services (CMS) officials to discuss the ongoing implementation of the Inflation Reduction Act (IRA).

During the meeting, CMS officials shared information related to the upcoming Medicare open enrollment period (Oct. 15 – Dec. 7), including ways pharmacists can help, such as encouraging patients to use the Medicare plan finder to ensure their prescriptions are covered and guiding them to other tools to manage out-of-pocket costs, including the IRA’s low-income subsidy and, in certain cases, the Medicare prescription payment plan.

CMS officials requested feedback on the current state of IRA implementation, noting that they are continuing to work on new guidance for implementing negotiated pricing. ASHP reiterated that only a prospective reimbursement model is a workable solution for implementing the negotiated price provisions of the IRA.

Specifically, ASHP raised serious concerns about the recent Johnson & Johnson (J&J) announcement that it is converting up-front 340B Drug Pricing Program discounts for disproportionate share hospitals to a rebate program for two drugs, Stelara and Xarelto. Both drugs are subject to IRA’s negotiated price provisions in Medicare Part D.

J&J has justified these changes as consistent with the IRA, even though there has been no final guidance requiring a rebate framework. If left unchallenged, J&J’s actions will likely spread to other manufacturers and other products. This will not only undercut the 340B program, but it will also dilute the value of the IRA negotiated pricing framework, seriously harming hospitals and the patients they serve.  ASHP urged coordinated Department of Health and Human Services (HHS) engagement to ensure that manufacturers are unable to pit the IRA and 340B programs against each other, to the detriment of public health.

“We are extremely appreciative of the Health Resources and Services Administration’s clear direction to J&J to cease and desist its rebate program,” said Tom Kraus, ASHP vice president of government relations. “However, the threat posed by allowing manufacturers to use IRA negotiations as a justification to raise prescription drug costs for safety net hospitals should be promptly addressed at the highest level of HHS to prevent serious disruption to patients served by 340B covered entities.”

ASHP will continue to update members regarding IRA implementation and our aggressive advocacy efforts to protect the 340B program.