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Our attorneys stay on top of changes in legislation, agency regulations, case law, and industry trends—then craft timely legal alerts to keep clients up to date on legal developments important to their business.

August 20, 2020

Drug Manufacturers Seek Claims Data From 340b Contract Pharmacies

There’s been a surge of drug manufacturers demanding or requesting 340b claims data from covered entities’ contract pharmacies. It’s expected that the list of manufacturers is going to grow quickly. The manufacturers claim they need the data to mitigate duplicate 340b drug discounts and ineligible rebates. However, the manufacturers have not cited any reason to suspect covered entities or contract pharmacies are engaging in any activities that undermine program integrity—this appears to be an attempt to obtain data for other motives.     

It’s unclear what the consequences will be for covered entities that do not comply with the requests for their contract pharmacy claims data. However, Sanofi has advised covered entities that the failure to upload data every two weeks beginning on October 1 will result in Sanofi no longer allowing providers to place bill to or ship to replenishment orders for Sanofi products. Other manufacturers have also alluded to making it difficult for entities that do not comply to obtain medically necessary drugs to treat their patients.

The requests are excessive in scope, as safeguards already exist to avoid duplicate discounts under Medicaid and the 340b program. Indeed, the 340b program already has well-established guidelines for manufacturers to conduct audits of covered entities. The blanket requests from the manufacturers do not cite any authority for demanding data beyond these safeguards. Moreover, the demands place a huge administrative and cost burden on the covered entities and contract pharmacies.

We recommend that covered entities and their contract pharmacies work with legal counsel to customize a response that addresses their unique issues. Our Health Care Controversies Team can assist you in developing a response that best suits your entity’s needs.   

If you have any questions regarding the content of this alert, please contact Linda Clark, Health Care Controversies Team leader, at lclark@barclaydamon.com; Brad Gallagher, counsel, at bgallagher@barclaydamon.com; or another member of the firm’s Health Care Controversies Team.

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