On October 5, 2021, Caravan Founder Lynn Barr joined Tom Mirga and Ted Slafsky from the 340B Report for an interactive webinar about 340B access to high-priced cancer drugs. The webinar discussed a recent investigation by 340B Report called “Bristol Myers Squibb/Celgene Myeloma Drugs: Patient Safety or Profit Motive?” That investigative series - available here - showed how the drug’s manufacturer limited the distribution of cancer drugs while exponentially increasing the price in order to prevent 340B covered entities (CEs) from accessing discounts.
The investigation focused on Revlimid, an oral treatment for adults with multiple myeloma, an incurable cancer of white blood cells. The 6-part investigative series details how drug manufacturers intentionally create a situation in which the manufacturer pays a minimum of 340B discounts. A former company executive, now whistleblower, explains how this is done intentionally to defraud the 340B program and maximize profits.
Revlimid is one of the most expensive oral medications, costing $16,023 for one month of treatment. Patients on Revlimid and similar high-priced medications must be able to fill their prescriptions at their preferred locations. At the same time, CEs should be able to access the 340B prices, as required by law, to continue providing life-saving care to their communities.
The U.S. Department of Health and Human Services (HHS) allows the drug’s manufacturer, Bristol Myers Squibb/Celgene to limit the number and type of pharmacies that can purchase and dispense Revlimid. There are good reasons for this; Revlimid can cause very serious birth defects. However, many retail and specialty pharmacies are well-equipped to manage even serious patient safety concerns.
A former executive with Bristol Myers Squibb/Celgene blew the whistle on company practices. This former company Vice President described how Bristol Myers Squibb/Celgene raised prices while limiting the distribution network, taking advantage of an orphan drug designation to limit discounts and maximize profits. Distribution was limited to just 250 locations, excluding most 340B eligible locations. The whistleblower stated that the company made approximately $298,000,000 in profits in 2018, by not providing full 340B discounts.
Impact on Caravan Health
There is a real-world impact to Bristol Myers Squib/Celgene’s actions. Caravan Health clients, made up of mostly rural independent safety net providers, have lost $25 million in 340B revenue just from Revlimid. The slide below shows that Caravan clients should have been able to purchase these drugs at the 340B discount rate, but instead paid the Wholesale Acquisition Cost (WAC). The difference between these prices is $25 million.
These are savings that should go to patient care, but instead are kept by the manufacturer. HHS has the authority to require Bristol Myers Squibb/Celgene to expand the networks and require greater participation in 340B. Based on the new administration’s assertive approach to promoting health equity, they may take a stronger position in favor or requiring 340B discounts for CEs.
This story highlights the struggle of 340B CEs to provide high quality care for their patients with drug companies’ resistance to maximizing availability of medications. HHS must protect 340B CEs and their patients by allowing full 340B discounts as allowed by law. Caravan Health urges the current administration to act on the information in the whistleblower complaint and compel Bristol Myers Squib/Celgene and other drug manufacturers in a similar position to support this longstanding program.
Contact us today to learn more information about Caravan’s 340B program.