July 21, 2010 – The federal Office of Pharmacy Affairs (OPA) cautioned Bristol-Myers Squibb (BMS) against offsetting repayments to 340B covered entities for overcharges on products sold between 1998 and 2005 with underpayments it says the entities made during the same timeframe.
Public Health Service Lieut. Cmdr. Devin Williams, an OPA program manager, disclosed the warning that his office gave BMS during the 340 Coalition annual conference in Washington yesterday.
A federal district judge in California ruled earlier this month that legal waivers that BMS attached to the overcharge payments were invalid in that state. Safety Net Hospitals for Pharmaceutical Access says it is taking steps to have the waivers declared illegal elsewhere in the country.
According to Williams, “longstanding” OPA policy forbids such reductions under the theory that if a manufacturer’s past price for a product had been set higher as it asserts it should have been, covered entities might not have bought it if a cheaper alternative had been available.
“BMS was made aware of OPA’s stance on this and they chose to do otherwise,” Williams said. He said no other manufacturer had ever before disregarded such a communication from OPA during his tenure at the office.
He also noted also that OPA has never before posted an overpayment notification by a manufacturer that includes an official disclaimer. The extra language states that the letter by BMS “is provided for informational purposes and does not constitute approval by (OPA) of the terms therein.”