AbbVie tries a new approach in 340B programme battle
AbbVie has opened a new front in the pharma industry's battle to change the 340B drug discounting programme for safety net hospitals in the US, after an early attempt was blocked in the courts.
For some time, the industry has been trying to change the 340B programme's use of upfront discounts on medicines to hospitals and clinics serving under-insured and low-income patients to one where rebates are paid to hospitals only after medicines have been purchased at normal commercial prices.
That change was due to be tested in a pilot programme proposed by the US government, but was recently knocked back by a federal judge, who ruled it would be unlawful and could hamstring healthcare systems serving some of the most vulnerable people in the US.
In its new lawsuit, AbbVie says it is attempting to "close loopholes and strengthen accountability" in the 340B programme, which it claims is open to abuse because of "an outdated and overly broad definition of a 340B patient."
The current definition, which dates back to 1996, allows hospitals and clinics to claim drug discounts for patients with "minimal or unrelated patient contact thousands of miles away, or even for the same prescription multiple times."
The result is that savings are being diverted elsewhere, which AbbVie maintains leads to higher healthcare costs for employers, taxpayers, and patients.
"Congress designed the 340B programme as a means of assisting a narrow class of safety-net providers in giving their low-income and vulnerable patients access to lower-cost prescription drugs and more-comprehensive healthcare services," according to the complaint.
"But in the years since its enactment, sophisticated participants have developed ways to exploit the programme for profit, causing it to grow exponentially. The volume of discounts accessed under the programme has similarly exploded – from approximately $6.6 billion in 2010 to $43.9 billion in 2021."
Abuse of the 340B system is a familiar complaint of the pharma industry, which has previously contended that recipients of the discounted medicines charge both uninsured patients and insurance companies higher prices, pocketing the difference. It is particularly unhappy about the proliferation of for-profit contract pharmacies, rather than in-house dispensers, using the programme.
Pharma companies were excluded from the federal government's defence of the rebate pilot in the December ruling, on the grounds that they had not been able to argue effectively that the government was capable of representing their interests in the dispute.
AbbVie's lawsuit takes a new tack, seeking changes to the definition of an eligible patient that include, for example, that prescriptions must be connected to care at the facility treating them and not from a different doctor or for an unrelated medical reason.
It also wants evidence of recent "real and substantive care" – via a visit that was sufficiently thorough to properly diagnose and treat the condition for which the drug is prescribed – and also that the provider is directly managing the care, not passing along a referral.
"As a longtime, proud participant in the 340B programme, AbbVie has seen firsthand how a nebulous interpretation of 'patient' can undermine – and ultimately destroy – [its] altruistic goals," said AbbVie in a statement.
"Our filing seeks to establish a clear, sensible patient definition to realign 340B with its original intent – serving vulnerable individuals and true safety net providers, not padding revenue streams that increase overall healthcare costs."
The lawsuit (1:26-cv-01190), which names HHS Secretary Robert F Kennedy Jr and HRSA Administrator Thomas Engels as defendants, has been filed in the US District Court for the District of Columbia.
Photo by Patrick Tomasso on Unsplash
