In the latest twist in a dispute over a federal discount drug program for safety-net hospitals, Novartis (NVS) agreed to modify previously announced plans to curtail its discounts, but the move still failed to quell opposition.
At issue is the 340B drug discount program, which was created in 1992 and requires drug makers to offer discounts that are typically estimated to be 25% to 50% — but could be much higher — on all outpatient drugs to hospitals and clinics that serve low-income populations. There are approximately 12,400 so-called covered entities, including 2,500 hospitals, participating in the program.
This past summer, drug makers warned discounts would be cut if hospitals buy medicines and then ship them to retail and specialty pharmacies for patients to pick up or for delivery, instead of dispensing the drugs through their own in-house pharmacies. Other drug makers said they may withhold discounts if they do not receive patient claims data beyond Medicaid recipients. Novartis, for instance, sought Medicare Part D and commercial health care data.
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