Companies Limiting Sales of Three Drugs in High Demand

by admin | April 7, 2011 8:54 pm

April 7, 2011—The manufacturers of the oral contraceptive Yaz and the oncology medicine Gemzar have notified the Office of Pharmacy Affairs (OPA) that they are limiting the drugs’ availability to all customers because both products have become subject to the 340B program’s “penny pricing” policy. Yaz is made by Bayer HealthCare and Gemzar by Eli Lilly and Co.

AstraZeneca, meanwhile, recently informed OPA that it was limiting it asthma drug Pulmicort’s availability “due to certain supply limitations and high demand.”

Third Time for Yaz

This is the third time in four years that Yaz has dropped to 340B’s penny ceiling price. The first time[1] was the second quarter of 2007 and the next was the fourth quarter of 2008.

For most brand-name drugs, 340B ceiling prices are the lower of a drug’s Medicaid best price or its average manufacturer price (AMP) minus its Medicaid unit rebate amount (URA), with an extra discount if a drug’s price rises faster than inflation.

Due to the inflation penalty, sometimes a drug’s URA will be greater than its AMP, resulting in a negative ceiling price. OPA developed its penny-price policy to deal with these situations. Under it, manufacturers must charge a penny per unit whenever the 340B formula yields a negative price.

Bayer and Lilly said they anticipated being unable to meet demand with their products priced at one cent.

The companies are both using the same limited distribution system that Bayer used and OPA condoned in 2007 and 2008. For all orders received on or after April 1, the companies will limit the amounts of Yaz and Gemzar that “any customer (340B, commercial or other) may purchase to that customer’s historical average ordering volume on a percentage basis applied to the then current month’s available supply.” Customers’ orders, the companies said, would be filled on a first-in, first-out basis until a customer reaches its predetermined quarterly limit. Bayer and Lilly both said that neither a customer’s 340B participation status nor the price it pays for either drug will affect its quarterly allotment.

Both companies said they expected that the systems would remain in place indefinitely.

Pulmicort shortage

AstraZeneca is limiting purchases of its Pulmicort 0.25 mg/ml and 0.5 mg/ml respules “by all customers” due to increased demand driven by limited supply. The American Society of Health System Pharmacists notes that budesonide, the generic version of the drug produced by Teva, is also in short supply.

Under AstraZeneca’s system, wholesalers are being limited in their direct purchases of Pulmicort based on the volume of purchases they made during the second and third quarters of 2010 and during January 2011. “Working with our wholesalers, we believe we are able to enforce fair and equitable distribution of Pulmicort respules among all customers during this shortage,” the company said. It said it could not predict how long the shortage would last.

OPA published the companies’ written notices on its Web site on April 1. Click here[2] for Bayer’s,here[3] for Lilly’s, and here[4] for AstraZeneca’s.

The Affordable Care Act required drug manufacturers to sell their products to 340B providers if the same products are “made available to any other purchaser at any price.” Hospital advocates had pressed for the language’s inclusion to guard against discrimination against 340B providers when drugs are in short supply.

Source URL: https://340bemployed.org/companies-limiting-sales-of-three-drugs-in-high-demand/

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