Sanofi plans to change hospital drug-discount program, WSJ reports

(Reuters) – French drugmaker Sanofi (NASDAQ:SNY) plans to change its policy on how it gives discounts to certain U.S. hospitals that serve low-income and uninsured patients, the Wall Street Journal reported on Friday.

Sanofi plans to send a letter, reviewed by WSJ, to hospitals outlining its new model on Friday, the report said, citing people familiar with the matter.

A company spokesperson said that Sanofi had no comment at this time.

Sanofi’s new plan will take effect early next year and will require institutions to provide pharmacy and medical claims information, such as the drug’s order or a patient’s hospital visit, before receiving federally mandated discounts under a program known as 340B, according to the report.

Under Sanofi’s new plan, certain hospitals covered by the 340B program would order drugs at full price from a wholesaler, the report added.

Last week, drugmakers Eli Lilly (NYSE:LLY) and Johnson&Johnson (NYSE:JNJ) filed cases centered around the 340B program against U.S. federal health agencies.

Lilly sued the Health Resources and Services Administration (HRSA) over allegedly blocking the company’s plan to change the way it offers drug discounts to hospitals. Lilly said that its program is designed to pay cash directly to 340B covered entities every week.

J&J, which sued the Health and Human Services Department, accuses the agency of blocking its plan to sell its psoriasis treatment Stelara and blood thinner Xarelto to some hospitals at full price before applying drug rebates.

The 340B program, in which drugmakers provide discounts to eligible healthcare providers that serve low-income populations, has been the focus of broad legal scrutiny over the years. Drugmakers must participate in the program to receive funds from government health insurance programs like Medicare and Medicaid.