J&J faces backlash from hospitals after revised drug-discount program: WSJ

Healthcare providers are up in arms against Johnson & Johnson (NYSE:JNJ) after the pharma giant, on Friday, significantly changed a program under which certain hospitals can get discounts for expensive drugs, The Wall Street Journal reported.

According to the WSJ, the company has introduced a new rebate system for hospitals participating in the government’s 340B program, through which healthcare providers serving uninsured and low-income patients can get discounts on costly outpatient drugs.

Citing a letter from JNJ, the Journal said that under the revised program, hospitals would have to pay full price for JNJ’s blockbuster medications, Stelara and Xarelto, upfront and later apply for a rebate.

The industry group, the American Hospital Association, was quick to criticize JNJ’s move, noting that it is an “example of big drug companies taking unilateral actions to advantage themselves at the expense of hospitals that care for America’s most vulnerable patients.”

The New Brunswick, New Jersey-based company defended itself, arguing that it was aimed at preventing what it called “rampant abuse and misuse” of the 340B program.

“To help the 340B Program better serve vulnerable patients, J&J is implementing reasonable, standard business practices used across other government programs and contracts,” a company spokesperson said.

Xarelto, a blood thinner marketed by JNJ and Bayer (OTCPK:BAYZF) (OTCPK:BAYRY), has already been targeted by the government as part of the Medicare price negotiation program introduced under the Biden administration’s Inflation Reduction Act in 2022. Meanwhile, psoriasis therapy Stelara will face low-cost generics in the U.S. next year.