By letter dated November 22, 2021, drug manufacturer UCB, Inc. notified covered entities that it is “altering its 340B policy” and will no longer honor contract pharmacy arrangements, effective December 13, 2021.  UCB’s policy applies to all UCB manufactured products distributed to pharmacies.  UCB will recognize the following exemptions from its new restrictive contract pharmacy policy:

• Federal Grantees:  UCB is “voluntarily exempting” federal grantees that are eligible to participate in the 340B program from this change in its contract pharmacy policy.  For federal grantees with 340B contract pharmacy arrangements, UCB states that it will continue to provide 340B priced drugs to “multiple contract pharmacies”.  Federal grantees do not need to apply for or register for 340B ESP to qualify for this exemption
• No In-House Pharmacy:  Covered entities that do not have an in-house pharmacy capable of dispensing 340B priced drugs to its patients are permitted to designate a single contract pharmacy location to receive 340B pricing.  Contract pharmacy designations must be made through 340B ESP at www.340besp.com/designations.  In order to ensure that a contract pharmacy designation takes effect on December 13, covered entities must make their designation through the 340B ESP website by December 1.  After December 13, covered entities must allow up to 10 business days for the designation to take effect.  UCB’s letter does not state that covered entities are required to register for an account with 340B ESP or submit claims data through the 340B ESP program in order to designate a single contract pharmacy location (this is similar to Sanofi’s and Boehringer Ingelheim’s policies).
• Wholly Owned Pharmacies:  Contract pharmacies that are wholly owned by a hospital, or under common ownership with a health system, will continue to receive bill-to/ship-to replenishment orders for 340B priced drugs.  In order to remain eligible, the wholly owned contract pharmacy must be registered in OPAIS as a contract pharmacy of the hospital.  340B hospitals that qualify for this exemption must apply for a “wholly owned contract pharmacy exemption” at www.340Besp.com/wholly_owned_application.

UCB is the ninth manufacturer to implement a policy that restricts 340B pricing on drugs shipped to contract pharmacies, despite ongoing litigation challenging such actions.  Three decisions have been issued in the manufacturers’ lawsuits filed against HHS challenging HRSA’s cease-and-desist letters.  HRSA recently issued the following statement on its website regarding the court rulings:

We are pleased that two of three recent U.S. District Court opinions involving the 340B Program agree with HRSA that three pharmaceutical manufacturers have unlawfully restricted access to 340B discounted drugs by covered entities that dispense medications through contract pharmacy arrangements – the core finding of HRSA’s May 17, 2021, Violation Letters.  HRSA respectfully disagrees with the recent District Court opinion finding that two other manufacturers had not violated the statute, and continues to evaluate its options.

The two US District Courts that HRSA agrees with are the US District Court for the Southern District of Indiana (Eli Lilly) and the US District Court for the District of New Jersey (consolidated decision for Sanofi and Novo Nordisk).  Eli Lilly, Sanofi, and Novo Nordisk have recently filed separate appeals with their district’s respective appellate court.  The US District Court for the District of Columbia reached a very different decision, disagreeing with HHS’ interpretation of the 340B statute and invalidating the May 17 Letters sent to Novartis and United Therapeutics.  HHS has not filed an appeal of this decision.  The next opinion expected is in the lawsuit filed by AstraZeneca in the US District Court for the District of Delaware.  Boehringer Ingelheim’s lawsuit challenging the May 17 letter and PhRMA’s lawsuit challenging the ADR process are also still pending.