Public Statement 8/26/24

Drugmaker’s Shift to Rebate Model for Hospitals Undermines 340B Program

COLUMBUS, Ohio – Johnson & Johnson, one of the world’s largest drugmakers, announced last Friday that it will discontinue upfront 340B pricing on two medications for disproportionate share hospital (DSH) covered entities. The move is part of a sustained campaign by large drug manufacturers to undermine the federal 340B Drug Pricing Program for participating hospitals and covered entities such as Equitas Health.  

The federal 340B Drug Pricing Program requires drugmakers participating in Medicaid to sell outpatient drugs at discounted prices to healthcare organizations that serve low-income and uninsured patients. Covered entities such as Equitas Health then reinvest pharmacy proceeds into vital healthcare programs such as primary care, specialized HIV care, behavioral health, and dentistry.   

J&J’s new policy affects 340B pricing for Stelara — a medication for arthritis and psoriasis — and Xarelto — which treats and prevents blood clots. J&J would require DSHs to pay full price for the medication then request a rebate through a third-party platform. The American Hospital Association said Friday that it reached out to the Health Resources and Services Administration (HRSA) — the federal entity that administers 340B — to share concerns about the policy and request more information. According to the AHA, HRSA said that “it has informed J&J that its rebate model is inconsistent with the 340B statute and that this model has not been approved by the Secretary of the Department of Health and Human Services.”  

If the J&J policy stands, it would create a significant cash burden on DSHs and other covered entities, with no guarantee of amount or timing of rebates. This would effectively block organizations like Equitas Health from participating in the 340B Drug Pricing Program, and in turn, create new barriers to patient care.  

David Ernesto Munar (he/him), President and CEO at Equitas Health, said: 

“Drug manufacturers once again are showing their willingness to prioritize profits over patient care. By chipping away at the 340B Drug Pricing Program, Big Pharma is threatening the long-term ability of community health organizations to provide the quality, affirming care that our patients deserve. Equitas Health will continue to sound the alarm about these illegal measures and demand that our elected officials move swiftly and decisively to maintain the integrity of the 340B program.”  

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 ABOUT EQUITAS HEALTH 

 Established in 1984, Equitas Health is a regional nonprofit community healthcare system. A federally-designated Community Health Center, it is one of the largest LGBTQ+ and HIV/AIDS serving healthcare organizations in the United States. With 22 offices in 13 cities, Equitas Health serves tens of thousands of patients in Ohio, Kentucky, and West Virginia each year through patient-centered, integrated, and cutting edge services, including primary and specialized medical care, pharmacy, dentistry, mental health and recovery, HIV/STI treatment and prevention, PrEP/PEP, Ryan White/HIV case management, care navigation, advocacy, and other community health initiatives. The Equitas Health Pharmacy is an integral and essential part of the health center’s comprehensive care and business models, reinvesting 100% of profits back into the organization’s programs and services. Equitas Health operates pharmacies serving patients in Ohio and Texas. For more information, visit equitashealth.com or find them on Facebook, Twitter, or Instagram. 

CONTACT:
Anthony Clemente (he/him)
Director of Marketing Communications
anthonyclemente@equitashealth.com