Johnson and Johnson is the latest of the big drugmakers to rebel against a federal drug discount program for hospitals and clinics that serve low-income patients.
The company said starting May 2 it will no longer offer the discounts to pharmacies, saying sometimes the program results in duplicate discounts.
But Shahid Zaman, policy manager for America’s Essential Hospitals, the trade group in Washington, D.C., that represents hospitals that treat mostly Medicaid or uninsured patients, noted that this battle started when the pandemic did.
“The timing of its has been questionable because particularly during a pandemic ,these restrictions started being placed in 2020 right in the midst of the cases surging,” he said.
Zaman said the profit motive is at work here.
“Eli Lilly, for example, has even mentioned in its earnings reports that a large part of their revenue increase is being driven by contract pharmacy sales increasing due to these restrictions they’re putting in place,” he said.
These so-called “safety net” hospitals include Newark Beth Israel and University Hospital in Newark.
Zaman said this is all playing out in court.
“There are at least 7 or 8 lawsuits that are currently pending,” he said. “While we do think it’s going to be a protracted and long process we’re hoping for a favorable result there that would clearly tell the manufacturers that they need to provide these discounts as obligated by the statute.”
Johnson and Johnson did not respond to a request for comment.