Neulasta and the 340B Drug Discount Program

On May 29, 2013, Safety Net Hospitals for Pharmaceutical Access (SNHPA) sent a letter to Amgen and issued a press release expressing concern over a shift in the distribution channel for our product Neulasta® (pegfilgrastim). As part of broader wholesaler and distribution changes across all of our products, Amgen recently moved Neulasta® to the specialty distribution channel for hospital outpatient departments that receive discounted prices on Neulasta® under the 340B Drug Discount Program¹.

As a participant in the 340B Program, Amgen has agreed to provide steeply discounted prices to certain health care facilities called "covered entities." Covered entities fall into a few categories, including federally designated "health centers," typically primary care clinics, that specialize in care for underserved populations, and hospital outpatient departments that serve a large number of patients with limited incomes. The recent change is related to the second category of covered entities.

The following are key facts regarding the change:

• Amgen has not changed the 340B pricing for Neulasta®. We continue to offer Neulasta® with the full statutory discount at the discounted price required under the 340B Program to all covered entities. Further, we have placed no minimum purchase requirements or other access limitations on the purchase of Neulasta®.

• The specialty distribution requirement does not single out 340B covered entities. Neulasta has been available through specialty distribution in the physician office setting of care (e.g., oncology clinics) since 2003, and in 2012 we fully transitioned and required all oncology clinics to use the specialty distribution channel for Neulasta®. The changes we recently made simply extend the specialty distribution requirement to hospital outpatient departments of 340B covered entities. Non-340B hospitals will continue to access Neulasta® through full-line wholesalers.

• Neulasta® is a specialty biological product, and it is most commonly distributed through the specialty channel. Before the recent change, about 50 percent of Neulasta® use was already through the specialty channel. Amgen distributes many of its products through this channel, as do many other biopharmaceutical companies.

• Both 340B and non-340B customers receive many other products exclusively from the specialty distribution channel. The specialty distribution channel is neither new nor novel. It is a well-established and customary distribution method to both 340B and non-340B customers alike, and these customers acquire many other specialty products through this channel.

The shift of Neulasta® sales to 340B hospital outpatient departments to the specialty distribution channel will also provide Amgen with a more focused, efficient and accurate data set to monitor and potentially audit Neulasta® 340B sales. We will be working with the U.S. Health Resources and Services Administration (HRSA) as well as our 340B customers before proceeding with any audit plan.

In closing, we reiterate that the specialty distribution channel for Neulasta® makes the statutory discounts and ceiling price available to all 340B covered entities. Further, the specialty distribution requirement previously was and will continue to be required for other types of customers (e.g., oncology clinics), not just 340B covered entities.

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