The 340B program, designed to aid underserved communities by allowing eligible healthcare entities to purchase medications at substantial discounts, is facing controversy due to perceived expansive growth and lack of oversight. Pharmaceutical giant Johnson & Johnson (J&J) recently proposed a significant change in how two of its drugs, Stelara and Xarelto, would be priced under the program. The proposal suggested that covered entities should initially pay full price and later submit claims for rebates. However, this was met with resistance from the Health Resources and Services Administration (HRSA), which oversees the 340B program. HRSA argued that the proposed changes were inconsistent with the statutory requirements of the 340B program and could not be implemented without prior approval.
In response to the HRSA’s concerns, J&J decided to withdraw its proposed rebate model, stating that the model aimed to address issues like duplicate discounts, where entities might receive both a 340B discount and a Medicaid rebate for the same drug. Although J&J argued that such audits to uncover duplicate discounts were thwarted by non-cooperative entities, it eventually conceded to not implementing the changes due to HRSA’s stern warning of potential termination of J&J’s participation in the 340B program. This would jeopardize access to necessary medications for numerous Medicare and Medicaid patients. J&J suggested that litigation might be a future step as it still believes in the legality and necessity of its rebate model, and it reserved all legal rights regarding this matter.
In other regulatory developments, numerous drugs have recently reached significant milestones. The FDA has approved several new treatments and expanded the uses of existing drugs. For instance, Exact Sciences’ Cologuard Plus, a more sensitive colorectal cancer screening test, and Fresenius Kabi and Formycon’s Otulfi, a biosimilar to J&J’s Stelara, received FDA approval. Eli Lilly’s drugs Retevmo and Kisunla also received approvals for treating advanced medullary thyroid cancer and early-stage Alzheimer’s disease respectively. Additionally, Sanofi and Regeneron’s Dupixent was approved for treating COPD, marking it as the first biological treatment approved for this condition.
In contrast to approvals, the FDA imposed a clinical hold on Kezar Life Sciences’ zetomipzomib due to patient deaths during a study, demonstrating the ongoing challenges and risks in drug development. Conversely, the FDA lifted a clinical hold on Biomea Fusion’s BMF-219 and a partial hold on Avidity Biosciences’ del-disiran, an RNA therapy for myotonic dystrophy type 1.
Moreover, some drugs faced setbacks. Pfizer voluntarily decided to withdraw Oxbryta from the market due to emerging safety concerns about increased rates of complications and deaths in patients. This decision reflects the delicate balance companies must maintain between drug efficacy, safety, and regulatory compliance.
These developments underscore the dynamic nature of the pharmaceutical industry and healthcare regulation, highlighting the continuous evolution of treatment options and the regulatory landscape that aims to ensure patient safety and access to effective treatments.
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