On August 23, Johnson & Johnson (J&J) announced changes to its 340B Drug Pricing Program discount available to disproportionate share hospital (DSH) Covered Entities on purchases of two of J&J’s most popular drugs, STELARA and XARELTO.
As of October 15, J&J will make a 340B discount on these drugs available through a rebate. According to the rebate model, DSH Covered Entities may purchase STELARA or XARELTO through wholesalers at a commercial price, such as wholesale acquisition cost, which is similar to that paid by non-340B customers. Following the dispensing or administration of the drug to eligible patients, DSH Covered Entities may submit rebate claim data within 45 days of the date of dispense. J&J will offer a six-month grace period to allow DSH Covered Entities to transition to the rebate model; during that time, DSH Covered Entities will be allowed to submit rebate claim data outside of the 45-day window. As of March 10, 2025, DSH Covered Entities will be required to submit rebate claim data within 45 days to receive 340B rebates on STELARA and XARELTO.
Meanwhile, the Health Resources and Services Administration (HRSA) notified the American Hospital Association that it warned J&J the rebate model has not been approved by the Department of Health and Human Services and is inconsistent with the 340B statute. HRSA advised that it will take action as warranted.
Rivkin Radler’s attorneys will continue to monitor this matter as it develops.
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