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Summary of Manufacturer Communication to Date

September 4, 2020


October 1, 2020 – Verity Solutions sent an update to all Covered Entity partners regarding recent activity by certain pharmaceutical manufacturers and our latest actions on behalf of our Covered Entities.

In summary, Verity Solutions has expanded the deployment of comprehensive order blocking for Eli Lilly, AstraZeneca, and Sanofi drugs to all Covered Entity contract pharmacy relationships only. The V340B system will continue to accumulate these blocked NDCs but will not order and replenish blocked NDCs systemically. At this time, no blocking actions are being taken for Novartis and Merck drugs as the information available regarding these manufacturer intentions is inconclusive at best.

For any questions, please contact your account manager, who will ensure the proper subject matter expert engages and responds to your query.

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September 4, 2020 – Various stakeholders, primarily drug manufacturers, have issued communications over the past few weeks that either request or attempt to compel covered entities to provide varying levels of claims data as a condition of continued access to 340B drug pricing in the context of traditional contract pharmacy relationships, while others have indicated an intention to limit the use of contract pharmacies by Covered Entities altogether. The following is a summary of those communications to date along with Verity Solutions’ interpretation. We will update this space as new information becomes available.

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Merck, Sanofi and Novartis – Each has issued communications to 340B Covered Entities requesting submission all of contract pharmacy claims data related to the dispense of their respective products on a bi-weekly basis to the 340B ESP website powered by Second Sight Solutions and owned by the Berkeley Research Group.

– Merck communicated a registration deadline of August 14th.
– Sanofi and Novartis communicated a registration deadline of October 1st.
– Claims to be reviewed for duplicate discounts for Medicaid (FFS and MCO), Medicare Part D and Commercial Claims.
– Merck has asserted that if Covered Entities do not provide a “significant response” to this request, they may take further action to address 340B program integrity through “less collaborative and substantially more burdensome” actions. At this juncture, we have not seen any additional detail published.
– Sanofi and Novartis have asserted that if Covered Entities do not opt-in, they will “no longer be eligible to place Bill To/Ship To replenishment orders” for their products dispensed through a contract pharmacy. At this juncture, we have not seen any additional detail published.
– After the August 14th deadline passed, 340B ESP sent out an invitation on August 17th for a training session the next day, August 18th. During this session, it was revealed that 340B ESP is requesting that ALL of a Covered Entity’s contract pharmacy claims be uploaded and 340B ESP would pull out only those for the participating manufacturers. Verity Solutions believes there is more explanation and justification warranted on this topic. We remain waiting for additional details to become available.

Lilly and AstraZeneca – Both manufacturers have asserted that they are implementing limited distribution of their 340B priced drugs to Covered Entities’ contract pharmacies.

– Lilly limited distribution of Cialis effective July 1, 2020 and will no longer sell this drug at 340B prices for shipment to contract pharmacies.
– On September 1, 2020, Lilly communicated its intent to expand this limited distribution policy, effective immediately, to include all of their drugs with labeler codes 00002, 00077 and 66713 with an exception for their Insulins in specific circumstances.
– AstraZeneca, starting October 1st, has indicated it will only ship to a Covered Entity’s owned Outpatient Pharmacy. If a Covered Entity does not have one, then Astra Zeneca has indicated it will ship to only one contract pharmacy location per Covered Entity. To date, Astra Zeneca has not offered further clarification as to whether it intends to limit a Covered Entity’s use of a single contract pharmacy to a single contract pharmacy licensed location or to all HRSA registered licensed locations of the contract pharmacy.
– With respect to AstraZeneca, Verity Solutions believes additional clarification is in order concerning questions such as:
– If the Covered Entity owns multiple outpatient pharmacies, can they all be included?
– Does the letter’s stipulation of “only 1 Contract Pharmacy” mean only one pharmacy, or only one pharmacy chain?

Kalderos Pay – Technology company Kalderos has announced it will launch a new product module as of September 8 that Kalderos asserts has the ability to replace Covered Entity purchases at statutorily mandated discount prices with “rebates” to Covered Entities after purchase. To date, we are not aware of any decisions by a manufacturer or manufacturers to implement the Kalderos product.

Read the full letter to Verity Solutions’ customers: Customer Comm Mftr Actions FINAL_9-4-2020

Limited Distribution Plan Notice for Eli Lilly and Company Products: 200901_Eli_Lilly_and_Company_Limited_Distribution_Plan_Public_Notice_4_ (1)