CSRXP: BIG PHARMA MUST BE HELD ACCOUNTABLE FOR ESCALATING ASSAULT ON CRITICAL 340B PROGRAM

Novo Nordisk Becomes Latest Drug Company to Dodge Requirement to Provide Affordable Medications to Covered Providers in Midst of Pandemic

Washington, D.C. – The Campaign for Sustainable Rx Pricing (CSRxP) issued a statement Thursday criticizing Novo Nordisk for becoming the latest Big Pharma giant to brazenly stop recognizing legally mandated prescription drug discounts for covered entities under the 340B program — targeting hospitals who rely on community-based pharmacies to deliver needed medications to their patients.

“Novo Nordisk’s attack on hospitals who serve many of America’s most vulnerable is unacceptable and not only hurts patients but violates both the intent and letter of the law which established the 340B program,” said CSRxP executive director Lauren Aronson. “Big Pharma must be held accountable for its ongoing assault on a program that supports access to care and critical health services for at-risk Americans, including those who are low-income and who live in rural areas, especially at the height of a health care crisis.”

“The complaints from brand name drug companies about rising discounts under the 340B program, used to justify their abandonment of a legally binding commitment, are absurd given the role of the industry’s own price hikes in the growth of those discounts,” Aronson continued. “In fact, the price of Novo Nordisk’s block buster insulin has more than tripled over the past decade – rising significantly faster than the rate of inflation.”

A significant reason why 340B discounts have increased is because the law requires increased discounts if a drug company hikes prescription drug prices at rates exceeding inflation, which has been an across the board standard for Big Pharma,” Aronson added. “Both Secretary Azar and the next administration must act to hold Big Pharma accountable for its assault on this critical program.”

Novo Nordisk’s assault on the 340B program comes on the heels of similar announcements from brand name giants Astra Zeneca, Eli Lilly, Sanofi and Merck. Last quarter, each of these brand name giants reported expectation-besting earnings and Astra Zeneca, Eli Lilly and Sanofi made their announcements shortly after participating in summer price hikes on nearly two dozen drugs.

BIG PHARMA’S PRICE HIKES INCREASE 340B DISCOUNTS

Big Pharma’s rhetoric targeting the 340B program points to high discount rates, but fails to acknowledge that the industry’s own price hikes are a key driver of larger discounts:

• The 340B program requires an “additional discount to offset price increases greater than inflation.” (Robert King, Drugmakers getting bolder in fight over 340B drug discounts, FierceHealthcare, 8/26/20)

• Novo Nordisk, Sanofi And Eli Lilly “Appear To Have Increased [Prices] In Lockstep Over A Number Of Years, Prompting Allegations Of Price Fixing.” (Tiffany Stanley, “Life, Death And Insulin,” The Washington Post, 1/7/19)
• Despite Growing Scrutiny Over Drug Pricing, In January 2019, Sanofi and Novo Nordisk Raised The List Price Of Insulin By As Much As 4.9 Percent. “Drugmakers kicked off 2019 with U.S. price increases on more than 250 prescription medicines by Jan. 2. That total has almost doubled, with pharmaceutical companies hiking prices on nearly 490 drugs by Jan. 10, according to Rx Savings. This includes insulin price hikes of between 4.4 percent and 5.2 percent by Sanofi and 4.9 percent by Novo Nordisk. Sanofi said its increases were below the Centers for Medicare & Medicaid Services projections for medical inflation, and that it expects net prices to drop in 2019.” (Michael Erman, “J&J Raises U.S. Prices On Around Two Dozen Drugs,” Reuters, 1/10/19)
• “When Charted Side By Side, The [Three Manufacturers’] Price Increases Seem To Be In Synch,” Something Known As Shadow Pricing. “In most industries, competition drives down prices. In this case, the competitors appear to increase prices side-by-side – something that’s been referred to as ‘shadow pricing.’ At least three companies – Eli Lilly & Co., Novo Nordisk, and Sanofi Aventis – make and sell insulin. Despite this competition, prices have steadily climbed over the past decade, taking single or double-digit list price increases in a year. A 10-milliliter vial of Sanofi’s long-acting insulin, Lantus, first hit the US market at $34.81 a vial in 2001, according to data from Truven Health Analytics … In other words, the competition seems to have done nothing to push prices down. In fact, when charted side by side, the price increases seem to be in synch.” (Lydia Ramsey, “There’s Something Odd About The Way Insulin Prices Change,” Business Insider, 9/17/16)
• “Novo Nordisk’s Fast-Acting Insulin Novolog Cost Almost $93 For A 10-Milliliter Vial In 2009. Today, It Costs About $290.” (Rachel Gillett & Shayanne Gal, “One Chart Reveals How The Cost Of Insulin Has Skyrocketed In The US, Even Though Nothing About It Has Changed,” Business Insider, 9/18/19)

• Since 2014: Prescription drug prices have risen 33 percent — or 20 times faster than the rate of inflation.
• In July 2020: Despite calls to suspend traditional mid-year price hikes while millions of Americans grappled with economic uncertainty caused by the COVID-19 crisis, Big Pharma increased prices on more than 65 brand name drugs.
• In January 2020: Big Pharma hiked prices on more than 600 drugs by an average of 5.2 percent.
• In July 2019: Big Pharma hiked prices on 104 drugs by an average of 13.1 percent.

ABOUT THE 340B PROGRAM

The 340B program was established by Congress to ensure health care providers serving America’s most vulnerable patients, including those with low incomes and living in rural communities, are able to acquire medications at a discount established by statute and invest the savings in care for patients and communities in need. In exchange, drug companies receive taxpayer-funded coverage for their products through the Medicaid and Medicare Part B programs.

In 2010, the Health Resources & Services Administration (HRSA), which oversees the 340B program, issued guidance explicitly stating that under HRSA’s interpretation of the statute drug companies must honor 340B discounts for covered entities purchasing medications to be dispensed to their patients through contract pharmacies.

Learn more about the 340B program HERE.

Learn more about market-based solutions to hold Big Pharma accountable and lower prescription drug prices HERE.