Brand Name Drug Company Shirks Requirement to Provide Affordable Medications to Covered Providers as Industry Complains About High Discounts Partially Driven by Its Own Price Hikes
For Immediate Release
Contact: Jon Conradi
Washington, D.C. – The Campaign for Sustainable Rx Pricing (CSRxP) issued a statement Thursday criticizing AstraZeneca for becoming the second Big Pharma giant to brazenly stop recognizing legally mandated prescription drug discounts for covered entities under the 340B program, by targeting providers who rely on community-based pharmacies to deliver needed medications to their patients.
“Big Pharma is escalating its assault on a program that provides access to care and critical health services for at-risk Americans, including those who are low-income and who live in rural areas, at the height of a public health crisis and must be held accountable,” said CSRxP executive director Lauren Aronson. “AstraZeneca’s brazen attack on the 340B program comes just one month after Eli Lilly made a similar announcement and just weeks after the company hiked prices on 18 prescription drugs in its portfolio, demonstrating a pattern of egregious disregard for Americans’ access to affordable medicines during the pandemic.”
“Big Pharma’s complaints about rising discounts in the 340B program are all the more ludicrous given the role of the industry’s own price-hiking practices in the growth of those discounts,” Aronson continued. “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.”
“Big Pharma’s assault on health care providers who serve many of America’s most vulnerable is unacceptable and violates both the intent and letter of the law which established the 340B program,” Aronson added. “Secretary Azar and the Administration must act to hold Big Pharma accountable for its assault on this critical program.”
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:
AstraZeneca was one of several Big Pharma companies to participate in biennial price hikes this summer – despite the unprecedented economic uncertainty facing millions of Americans grappling with the pandemic – by increasing prices on 18 drugs, including on popular cholesterol drug Crestor; heartburn medication Nexium, chronic obstructive pulmonary disease (COPD) medication Daliresp and blockbuster drug Symbicort. The brand name drug company aggressively raised prices in the middle of a pandemic, even while receiving hundreds of millions in taxpayer funding. “AstraZeneca’s second round of increases came after it secured a $1.2 billion commitment in May from the U.S. for vaccine development and as the company was reporting more than $3.6 billion in operating profits in the first half of 2020,” The Los Angeles Times reports.
In July of this year, AstraZeneca reported a net profit of $756 million, up from $130 million in the same period a year earlier, after increasing prescription drug prices at least 25 times earlier in the year.
AstraZeneca has a long record of hiking prices on American patients and gaming the system to undermine competition:
Big Pharma’s repeated price hikes have created a crisis of prescription drug affordability. Drug companies’ own greed has also increased the size of discounts under the 340B program, through inflationary penalties that are meant to disincentivize the industry’s rampant price-gouging of medications needed by many of the nation’s most vulnerable patients.
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.