Federal Agency Rejects J&J’s 340B Rebate Model, Vows to Take Action

Johnson & Johnson's New Policy:
J&J announced a change in its 340B pricing model for two drugs, Stelara and Xarelto, shifting from upfront discounts to a rebate program starting October 15, 2024.

Federal Agency Opposition:
The Health Resources and Services Administration (HRSA) stated that J&J's rebate model is inconsistent with the 340B statute and has not been approved by the Secretary of the Department of Health and Human Services.

Impact on Hospitals:
The rebate model could increase costs for hospitals by requiring them to pay full price for drugs and then seek rebates, potentially straining their finances.

Legal and Regulatory Actions:
HRSA promised to take appropriate actions as warranted, and 340B Health filed a formal request to stay J&J's policy change.

Industry Reaction:
The American Society of Health-System Pharmacists (ASHP) and 340B Health oppose J&J's new policy, arguing it violates the 340B statute and could harm patients and healthcare providers.