Paper Document - Congressional investigation could result in drug manufacturer refunds to 340B covered entities

Congressional investigation could result in drug manufacturer refunds to 340B covered entities

A congressional investigation, in the works for more than a year, may produce refunds for 340B covered entities as a result of overcharges from drug manufacturers participating in the 340B program.

In October 2014, Vermont Sen. Bernie Sanders and Maryland Rep. Elijah Cummings asked 14 generic drug manufacturers to document and explain escalating prices associated with certain generic drugs. In the process of conducting research to respond to the congressional investigation, some drug makers are uncovering issues with their 340B pricing from prior years. So far, the ongoing investigation has resulted in anticipated refunds for covered entities from two drug manufacturers, Zydus and Heritage.

Zydus Pharmaceuticals

Zydus Pharmaceuticals, the U.S. division of Indian drugmaker, Cadila Healthcare, posted a notice on the Health Resources and Services Administration’s Office of Pharmacy Affairs (OPA) public website regarding recalculated 340B ceiling prices that affect drug purchases that occurred between the first quarter of 2012 and the fourth quarter of 2014. The notice lists 278 unique National Drug Codes (NDCs), which represent various package sizes and strengths of 65 generic drugs.

Zydus notes that they will be working with through the 340B prime vendor, Apexus, to provide refunds to covered entities that are determined by Zydus to have overpaid by $10 or more. Apexus expects to notify covered entities impacted by this price recalculation by Nov. 30.

Covered entities that believe they are owed a refund, but are not contacted by Apexus, may request a refund after Nov. 30 by calling Zydus directly at 609.730.1900 or by sending an email to: 340BRefund@zydususa.com. These requests must be received by Zydus before Dec. 31, 2015.

Heritage Pharmaceuticals, Inc.

In mid-September, Heritage Pharmaceuticals, Inc., a U.S.-based generic drug manufacturer owned by the Indian drugmaker, Emcure, posted a notice on the OPA website acknowledging that “340B pricing to participating 340B covered entities was not extended on purchases of its products made between April 18, 2008, and Dec. 31, 2014.” The Heritage notice pertains only to purchases of products with the NDC labeler code 23155.

Affected covered entities may request a refund by contacting Damian Finio at 340b@heritagepharma.com on or before Monday, Aug. 1, 2016.

The investigation continues

Investigations into generic drug prices are continuing as part of a new review spearheaded by the Department of Health and Human Services’ Office of the Inspector General (OIG). The OIG’s ongoing review of generic price increases between 2005 and 2014 is looking at how often drug price increases exceeded the inflation rate – and how these increases may have affected Medicaid drug rebates. In addition, on Sept. 21, Sen. Sanders and Rep. Cummings requested financial records from Turing Pharmaceuticals in connection with dramatic price increases to the drug Daraprim, an anti-toxoplasmosis drug. These records are due to Congress by Oct. 9.