Attorney General Tong Leads Coalition of Attorneys General in Important Win on Prescription Drugs
(Hartford, CT) — Attorney General William Tong issued the below statement following an advisory opinion from the Health and Human Services Department (HHS) that concludes drug manufacturers are required to deliver discounts under the 340B Drug pricing Program on covered outpatient drugs when contract pharmacies are acting as agents of 340B covered entities.
“This is a powerful statement from HHS that puts a tremendous amount of pressure on drug companies to do the right thing,” Attorney General Tong said. “It is very encouraging to see HHS affirm Congress’s plain intent for the 340B Drug Pricing Program, and is consistent with the continuing efforts of this office to protect vulnerable patients from the unlawful and unacceptable actions of these drug manufacturers.”
Earlier in December, Attorney General Tong led a bipartisan coalition of attorneys general urging the U.S. Department of Health and Human Services to hold accountable drug manufacturers that are unlawfully imperiling access to affordable prescriptions for low-income patients. The letter urged HHS to use the authority Congress provided it to hold drug manufacturers accountable to their legal obligations under the 340B Program noting that the current pandemic sharpens the need to stand by vulnerable patient populations and the healthcare institutions that serve them.
The 340B Drug Pricing Program requires drug manufacturers to provide discounted drugs to eligible health centers and hospitals, including community health centers, nonprofit and public hospitals, and Ryan White HIV/AIDS clinics, helping providers keep costs low even as prescription drug prices rises. In the letter earlier this month addressed to Health & Human Services Secretary Alex Azar, Attorney General Tong and a coalition of attorneys general argued that by withholding or threatening to withhold these critical discounts, drug manufacturers Eli Lilly & Company, AstraZeneca PLC, Sanofi SA, Novartis Pharmaceuticals, Merck & Co., United Therapeutics Corp., and others, put low-income patients at risk of losing access to affordable medications while communities continue to battle the COVID-19 pandemic. The 340B Drug Pricing Program has strong bipartisan support, and Congress has acted numerous times to ensure drug manufacturers continue to comply with the program’s mandates.
As a condition of having their drugs covered by Medicaid and Medicare Part B, Congress required drug manufacturers to enter into Pharmaceutical Pricing Agreements (PPA) with the HHS Secretary to limit the amount public hospitals, community health centers, and others serving indigent patients have to pay drug manufacturers for medications. These PPAs require the companies to offer each covered medication to providers “at or below the applicable ceiling price”. Instead of complying with their obligations, Eli Lilly & Company, AstraZeneca PLC, Sanofi SA, Novartis Pharmaceuticals, Merck & Co., United Therapeutics Corp., and others have unlawfully refused, threatened to stop providing discounts, or have put unreasonable conditions upon the discounts, potentially depriving Americans who rely on them with essential healthcare resources that they need as the country deals with a public health crisis.
Under the 340B Drug Pricing Program, HHS has the authority to address violations of the program by drug manufacturers. For example, HHS may require manufacturers to reimburse covered healthcare centers and/or terminate manufacturers’ PPAs.
In October, Attorney General Tong sent letters to Eli Lilly, Astra Zeneca, Merck, Sanofi, and Novartis demanding the drug makers immediately abandon their unlawful actions imperiling access to affordable prescriptions for low-income patients.