Novo Nordisk expands 340B contract pharmacy restrictions to all covered entity types and modifies its hospital policy.

Insights340B, Client Alert

 On May 1, 2024, the drug manufacturer Novo Nordisk posted a notice outlining revisions to its contract pharmacy restriction policy. The new policy takes effect on July 1st and may require your covered entity to take action by June 23. 

The 100-year-old Danish company Novo Nordisk has been thrust into the spotlight recently due to the blockbuster success of its diabetes and weight-loss drugs, Ozempic and Wegovy. Other popular Novo Nordisk products include Levemir, NovoLog, Novolin, Victoza, and Tresiba. The ‘Big Three’ insulin makers (Novo Nordisk, Eli Lilly, and Sanofi) make up >95%1 of the U.S. insulin market and a large share of the overall anti-diabetic drug market. Until now, Novo Nordisk was the crucial remaining 340B diabetes drug option available to grantee covered entities. Many grantees have transitioned their low-income and uninsured diabetes patients to a Novo Nordisk 340B treatment. For grantees who may have previously tried to work around the contract pharmacy restrictions without engaging in data sharing or designations, this may be a turning point in their decision-making process. 

Novo Nordisk has previously communicated contract pharmacy restriction policies that applied to Hospital Covered Entity (CE) types and allowed for each hospital to select two designated contract pharmacy exceptions (one retail, one specialty) that would remain able to receive 340B-priced Novo Nordisk drugs. 

Beginning July 1, 2024, Novo Nordisk’s new policy applies to all CE types, including grantees: 

Hospital CEs are allowed a maximum of two contract pharmacy designations (New- this can be two retail, two specialty, or one of each). Novo Nordisk will continue allowing 340B orders to an unlimited number of wholly-owned and operated contract pharmacies if the hospital uploads claim-level dispense data to the ESP platform on a timely basis. 

Grantee CEs are also allowed two2 contract pharmacy designations (two retail, two specialty, or one of each). Claims data is not required for the two designated pharmacies. In addition to the two designations, grantees should be able to retain access to Novo Nordisk pricing at an unlimited number of contract pharmacies if they upload claim-level dispense data to the ESP platform on a timely basis. 

Contract Pharmacy Designation typically results in the designated pharmacy being able to enjoy relatively stable and consistent access to the 340B price, similar to what you would see with pricing access at an entity-owned pharmacy. The Novo Nordisk policy is different from most other manufacturer policies in that Novo Nordisk will allow you to designate two exception pharmacies regardless of whether or not you have an entity-owned pharmacy. In contrast, most other manufacturer policies allow a designated pharmacy only if the covered entity does not have a pharmacy of its own that is capable of dispensing that drug maker’s products. 

Submitting Claim-level Data to ESP was a more commonly utilized option earlier in the history of contract pharmacy restrictions, but drug manufacturers have largely moved away from offering data submission as a means of unlocking access at additional contract pharmacies. With this new policy, Novo Nordisk is allowing the option to upload claim-level data for some additional access, depending on the CE type. Importantly, claims data must be uploaded to ESP within 30 days of July 1st and 45 days of the prescription’s dispense date thereafter, and claims submission can be an onerous process. 

Covered Entities that wish to designate contract pharmacy exceptions for Novo Nordisk must do so by June 23rd in order to have pricing effective at those designated pharmacies on July 1st when the new policy takes effect. CEs will use the ESP platform (https://www.340besp.com) to make the designations. 

If you have any questions about the ESP designation or data upload process, Draffin Tucker’s team of 340B experts is happy to discuss and help you navigate some of the nuances of the ESP system. Contact us at 340B@draffin-tucker.com. We will also be hosting a 340B Webinar in June on current factors that result in a reduction in 340B savings, including a discussion of how community health centers can lessen the impact of contract pharmacy restrictions. 

Webinar: Who Moved My Savings? An exploration of changes in the drug pricing landscape that reduce 340B savings. 

Date/Time: Jun 4, 2024 2:00 PM EDT 

Registration Link: https://attendee.gotowebinar.com/register/2354733232788485975 

 

1 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8915140/ 

2 It appears that Novo Nordisk may allow Community Health Centers to designate two designated pharmacies per Associated Site, but we are still working to validate if that will be an option.