Novo Nordisk Becomes Latest Drug Company to Dodge Requirement to Provide Affordable Medications to Covered Providers in Midst of Pandemic
For Immediate Release
Contact: Jon Conradi
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:
Novo Nordisk was one of several brand name giants to ring in 2020 with price hikes, including on several diabetes medications. The brand name giant is also one of the three largest manufacturers of lifesaving diabetes drug insulin – along with Sanofi and Eli Lilly – and has shamelessly engaged in egregious practices to keep prices rising at the expense of American patients.
Big Pharma’s repeated price hikes have created a crisis of prescription drug affordability. These hikes have 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.