Johnson & Johnson Abandons 340B Rebate Plan Following HRSA Pressure and Congressional Advocacy

Reversal of Plan:
Johnson & Johnson (J&J) has decided to abandon its controversial 340B rebate plan for hospitals involving two of its blockbuster drugs, Stelara and Xarelto, due to pressure from the Health Resources and Services Administration (HRSA) and congressional advocacy.

HRSA Warning:
HRSA threatened J&J with sanctions, including termination of its Pharmaceutical Pricing Agreement and/or imposition of civil monetary penalties, if it proceeded with the rebate plan.

Congressional Support:
Seven members of Pennsylvania’s congressional delegation, along with other lawmakers, advocated against J&J’s rebate plan, highlighting its potential to severely impact safety net providers and their patients.

J&J’s Defense:
J&J defended its proposed rebate model as lawful and aimed at protecting the integrity of the 340B program, but ultimately decided to forgo its implementation due to HRSA’s enforcement threats.

Impact on Healthcare:
The 340B program provides drug discounts for certain hospitals serving patients below the federal poverty level. J&J’s original plan would have required hospitals to purchase drugs at full price and then receive rebates later, which critics argued would have harmed access to care.