J&J Warned to Scrap Drug Rebate Planned in Lieu of Discounts (1)

Johnson & Johnson’s proposal to end upfront discounts for drugs purchased by hospitals treating low-income and uninsured patients may result in terminated pricing agreements or sanctions, according to a letter from a federal health agency.

The Health Resources and Services Administration, part of the Department of Health and Human Services, warned J&J in a letter Tuesday that the company should scrap its plan to provide rebates on its drugs rather than upfront discounts to certain health-care providers under the federal 340B Drug Pricing Program.

“By way of this correspondence, HRSA provides warning that this unapproved rebate proposal violates J&J’s ...