J&J Reverses Plan for 340B Drug Rebate

October 02, 2024

Johnson and Johnson (J&J) announced this week it was forgoing a controversial plan to offer rebates for certain 340B drugs instead of direct drug discounts.

The reversal from J&J follows advocacy from Congress—including seven members of Pennsylvania’s delegation—and a warning from the Health Resources and Services Administration (HRSA) that the rebate plan was unlawful.

Under its plan, J&J planned to transition two 340B drugs from direct discounts to a rebate model for Medicaid Disproportionate Share Hospitals (DSH).

In a letter released Friday, lawmakers highlighted the way J&J’s rebate plan would affect access to care at 340B hospitals.

“This unapproved and unlawful change would have severe consequences for our nation’s safety net providers and the patients they serve,” the letter notes.

Also Friday, HRSA called on J&J to cease plans for the rebate model for sales of the two 340B covered outpatient drugs (Stelara and Xarelto) by the end of the month. On Monday, J&J said it had to reverse course on the proposed rebate model.

“We will continue to seek constructive engagement with HRSA, and all stakeholders, to explore solutions to modernize the 340B Program with more transparency, accountability, and oversight,” the company said in a statement.

HAP thanks members of the Pennsylvania delegation for their support of DSH hospitals on this issue, including Representatives Brendan Boyle (D-PA-2), Dwight Evans (D-PA-3), Madeleine Dean (D-PA-4), Mary Gay Scanlon (D-PA-5), Chrissy Houlahan (D-PA-6), Susan Wild (D-PA-7), Matt Cartwright (D-PA-8), Glenn “GT” Thompson (R-PA-15), Christopher Deluzio (R-PA-17).

For questions about HAP’s federal advocacy, contact John Myers, HAP’s vice president, federal advocacy.