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Around the nation: Government threatens to sanction J&J over 340B rebate plan


The Health Resources and Services Administration (HRSA) has threatened to sanction Johnson & Johnson (J&J) if the company continues with its plan to alter 340B payment methods for some hospitals, in today's bite-sized hospital and health industry news from Florida, Georgia, and Maryland. 

  • Florida: FDA has sent a warning letter to Regenerative Processing Plant, saying that its Regener-Eyes Pro and Regener-Eyes Lite products were unapproved new drugs since they claim to treat dry eyes. Previously, FDA sent a letter to the company about a version of its Regener-Eyes product containing amniotic fluid. Another letter was later sent about other eye drops made with amniotic fluid. In the latest letter, FDA continued to raise concerns that the company was still producing eye drops with amniotic fluid, even though it said it stopped doing so in June 2021. The agency also said that the facility violated several good manufacturing practices, including not validating its aseptic practices. According to Sandra Brown, a board member of the Dry Eye Foundation, if the company is indeed selling eye drops with amniotic fluid, it could be dangerous for the public. "Because it is illegal to manufacture and sell amniotic fluid eye drops, there are no established quality controls on the supply chain of amniotic fluid and no standards for rendering it sterile," Brown said. "The fluid could be contaminated with bacteria or viruses, including organisms that cause sexually transmitted diseases." (Fiore, MedPage Today, 9/17)
  • Georgia: Karen Knudson, CEO of the American Cancer Society (ACS), will step down from the position this year. Previously, Knudson was EVP of oncology services and enterprise director for the Sidney Kimmel Comprehensive Cancer Center at Jefferson Health. In June 2021, Knudson joined ACS as its first female CEO. During her tenure at ACS, Knudson helped create a patient support program to assist patients with logistics, expanded the organization's investment arm, and established a chief diversity officer role. According to Modern Healthcare, Knudson will serve as a strategic advisor for the organization to help with the leadership transition through early 2025. Currently, ACS plans to name an interim CEO by the end of the year and conduct a national search for a permanent CEO. In a news release, ACS said Knudson is moving into the "next phase of her strategy" on cancer initiatives. (Hudson, Modern Healthcare, 9/13)
  • Maryland: HRSA has threatened to sanction J&J if the company continues with its plan to alter 340B payment methods for some hospitals. In a letter, HRSA said that J&J's plans to issue rebates instead of offering discounted prices for two widely prescribed medications would violate federal law. The agency said the decision is unlawful because it would require hospitals to purchase the medications at prices higher than what the 340B program allows. HRSA has warned J&J that if it goes through with the decision, which is slated to go into effect Oct. 15, the company's contract to participate in the 340B program could be terminated, and it could face penalties of $7,000 for each violation. So far, HRSA has told J&J not to go forward with its rebates plan and given the company until Sept. 30 to respond. (Silverman, STAT+ [subscription required], 9/17)

Cheat sheet: 340B Drug Pricing Program

Learn how the 340B drug pricing program helps reduce costs for providers serving low-income populations.


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