Novo Nordisk Tightens Restrictions on 340B Drugs Dispensed by Contract Pharmacies; Organon Becomes the 22nd Manufacturer to Issue Restrictions
On June 1, 2023, Novo Nordisk and Organon each announced restrictions on hospital access to 340B drugs at contract pharmacies. Novo Nordisk’s notice updates its previous policy while Organon’s policy is new, making it the 22nd manufacturer to restrict access to 340B drugs at contract pharmacies. The manufacturers’ policies will become effective on July 1, 2023. Covered entity hospitals must designate their contract pharmacy for Organon and Novo Nordisk by June 16 and June 17, respectively, for the designation to become effective by July 1.
Novo Nordisk’s revised policy applies to all covered entity hospitals and all of its drugs, but does not apply to grantees. The following new restrictions will apply regardless of whether the hospital has an in-house pharmacy:
- One Retail and One Specialty Contract Pharmacy: Hospitals will no longer be able access 340B drugs at an unlimited number of contract pharmacies if they submit claims data to 340B ESP. As under Novo Nordisk’s current policy, hospitals may designate a maximum of two contract pharmacies without submitting claims data to 340B ESP —one retail and/or one specialty as determined by Novo Nordisk.
- Wholly Owned/Affiliated Contract Pharmacies: Hospital covered entities will now be required to submit 340B ESP claims data to continue accessing 340B drugs at an unlimited number of wholly owned/affiliated contract pharmacies. Hospitals must submit claims data to 340B ESP within 30 days of purchasing the drug and 45 days from dispensing the drug.
This is the second time that Novo Nordisk has revised its 340B contract pharmacy policy. The latest iteration is actually a return to its original policy that Novo Nordisk seemingly abandoned in response to a complaint filed against it under a first-of-its-kind state law – Arkansas Act 1103 – that prohibits manufacturers from restricting the distribution of 340B drugs dispensed by contract pharmacies. Novo Nordisk’s decision to return to its original, more restrictive policy is consistent with the wave of tighter restrictions that manufacturers have adopted in the wake of the federal Third Circuit decision upholding manufacturers’ right to limit the sale of contract pharmacy drugs.
Organon’s new policy applies to all hospital covered entities and to all of its drugs. The following restrictions will apply regardless of whether the hospital has an in-house pharmacy:
- One Contract Pharmacy: Hospitals may designate a single contract pharmacy if they submit claims data to 340B ESP for that pharmacy. Hospitals must submit claims data to 340B ESP within 45 days of dispensing the drug.
- Wholly Owned/Affiliated Contract Pharmacies: Wholly owned/affiliated contract pharmacies are treated the same as any other contract pharmacy (i.e., hospitals may access 340B pricing only through one).
The Powers 340B team will continue to monitor manufacturers’ restrictive contract pharmacy policies.