As a 340B consulting partner, we know the importance of staying ahead of developments that could reshape the program. The ongoing legal battles between pharmaceutical manufacturers and the federal government over rebate models have raised concerns for covered entities, creating uncertainty about compliance, financial sustainability, and patient care.

Here’s a detailed look at who’s involved, what’s at stake, and what these developments mean for your organization.

The Key Players and Lawsuits

Bristol-Myers Squibb (BMS)

• Action: Sued the federal government (November 25) to implement a rebate model starting with Eliquis, a drug under Medicare price negotiations.
• Proposed Model: Rebates would replace upfront 340B discounts, with providers claiming the difference after purchasing at market price.
• Why It Matters: BMS claims this approach would address “program abuse” and ensure compliance with Medicare reforms. However, providers argue it will increase costs and complexity, threatening the program’s sustainability.

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Johnson & Johnson (J&J)

• Timeline:some text
  • August 23: Announced a rebate model for Stelara and Xarelto, requiring detailed claims data.
  • September 30: Withdrew the proposal after HRSA threatened enforcement.
  • November 12: Filed a lawsuit to challenge HRSA’s authority.
• HRSA’s Response: Rebates, without explicit agency approval, violate the 340B statute.
• Key Concern: If successful, J&J’s model could set a precedent for limiting upfront discounts on high-cost drugs, directly impacting cash flow for covered entities.

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Eli Lilly

• Action: Filed suit on November 15 to establish a broader rebate model across all products and covered entity types.
• Proposal: Providers would use Kalderos’ Truzo platform to submit claims for rebate reimbursement.
• Implication for Providers: The shift to post-purchase rebates would require additional administrative oversight, delaying access to cost savings that many entities rely on to fund critical services.

Sanofi

• Action: Announced a “340B Credit Model” on November 22, requiring providers to purchase drugs at wholesale acquisition cost and submit claims for post-purchase rebates.
• Provider Opposition: Advocacy groups argue this approach undermines the program’s intent by creating financial and operational burdens.
• HRSA’s Stance: While not directly opposing Sanofi’s model yet, HRSA has signaled that unapproved rebate models violate program rules.

Why This Matters to Covered Entities

Financial Impact

• Transitioning from upfront discounts to rebate models creates significant cash flow challenges.
• Entities may need to navigate delays and administrative hurdles to secure reimbursements.

Operational Complexity

• Tracking claims data and ensuring timely submissions to third-party platforms like Beacon or Kalderos adds administrative strain.
• Missteps in compliance could expose entities to legal risks or loss of program eligibility.

Patient Care Concerns

• Reduced access to immediate discounts could limit an entity’s ability to provide affordable medication to underserved populations.
• The program’s financial benefits are often reinvested into critical patient services, which may now be at risk.

How RxTrail Can Help

Ensure Compliance

• Prepare Your Team: Equip your staff to meet Sanofi’s Beacon platform requirements seamlessly.
• Optimize Data Submission: Review and refine your data processes to prevent disruptions and ensure smooth operations.

Streamline Operations

• Efficient Claims Management: Validate and process claims effectively, ensuring every eligible claim is captured.
• Error Prevention: Avoid costly mistakes with our hands-on software optimization and compliance support.

Maximize Savings

• Identify Opportunities: Pinpoint missed savings and enhance your referral capture and TPA systems.
• Stay Proactive: Get ahead of policy changes with our up-to-date guidance and tailored solutions.

What’s Next for 340B?

The future of rebate models and their impact on the 340B program remains uncertain. With legal challenges and agency pushback escalating, it’s crucial to stay informed and prepared.

We’ll continue to monitor these developments and provide actionable insights to help you navigate the changing landscape.

If you’re concerned about how these changes might affect your program, let’s connect. Together, we can ensure your 340B program remains compliant, efficient, and focused on patient care.

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