On December 13th, the Health Resources and Services Administration (HRSA) issued a letter to Sanofi calling for the manufacturer to cease implementation of its rebate model, which Sanofi terms a “credit model.” HRSA warned Sanofi that the “unapproved credit proposal violates Sanofi’s obligations under the 340B statute.” HRSA stated that it “expects” Sanofi to cease implementation by no later than December 20, 2024 and warned Sanofi of the potential consequences of violating the 340B statute.

HRSA’s letter to Sanofi mirrors the first letter it sent to Johnson & Johnson over its proposed rebate model on September 17, 2024. In both letters, HRSA asserted its authority to terminate the manufacturers from the 340B program but does not expressly state that it will proceed with doing so. In Johnson & Johnson’s case, HRSA explicitly stated that it would terminate Johnson & Johnson from the 340B program in a follow up letter ten days later when the manufacturer failed to withdraw its proposal. Johnson & Johnson subsequently paused its rebate model and sued HRSA over its position.

Sanofi’s proposed model would take effect on January 6, 2025. It would apply to all 340B hospitals except children’s and cancer hospitals, and would cover 25 drugs, including several insulin products. Effective March 1, 2025, the Sanofi model would apply to community health centers. The Sanofi announcement includes variations for covered entities in some states that have adopted laws requiring delivery of 340B drugs to contract pharmacies.

The Powers 340B team will continue to monitor any additional developments.