On Sept. 17, the Health Resources and Services Administration (HRSA) Administrator Carole Johnson sent a letter to drug manufacturer Johnson & Johnson (J&J) (PDF), directing J&J to withdraw its proposal to implement a rebate model for two drugs purchased through the 340B Drug Pricing Program. This enforcement letter comes in response to an Aug. 23 announcement by J&J (PDF) that, beginning Oct. 15, it intends to replace upfront 340B discounts with a retrospective rebate model for drugs Xarelto and Stelara when purchased by disproportionate share (DSH) hospitals. Under this new policy, DSH hospitals would be required to pay the commercial price for these drugs up front and then submit a rebate claim for these drugs to J&J to receive a retrospective rebate.
Stating its view that the rebate model is inconsistent with the 340B statute, HRSA called on J&J to immediately cease implementation of its rebate model and to provide an update to HRSA by Sept. 30. HRSA noted in the letter that if J&J fails to comply, HRSA could take enforcement action against the manufacturer by either revoking its pharmaceutical pricing agreement or referring J&J to the Department of Health and Human Services Office of Inspector General to consider imposing civil monetary penalties for not honoring the 340B ceiling price.