WASHINGTON, D.C. — U.S. Senator Peter Welch, a member of the Senate Finance Committee, today demanded answers from Apexus LLC regarding concerning financial practices the company has reportedly been engaged in as the 340B program’s Prime Vendor. Senator Welch also requested information from the company about the financial structure of Apexus’s 340B contract, including how Apexus earns money through the Prime Vendor contract. 

“Congress created the 340B program to allow Disproportionate Share Hospitals (DSH), community health centers, and other safety net health providers to purchase prescription drugs from manufacturers at a discounted price,” wrote Senator Welch. “In 2023, 340B providers (covered entities) purchased $66.3 billion in outpatient drugs through the 340B program, and as of 2022, the program served over 10 million patients across the country. 
 
The Senator continued: Apexus’s revenues have grown as the 340B program has expanded—doubling in just five years between 2018 and 2022, with profit margins above 80%. According to documents obtained by the Times, Apexus employees were incentivized with bonus compensation tied to revenue growth. The 340B statute sets a narrow role for the Prime Vendor and the activities described above appear to extend beyond the scope contemplated in statute. 

According to reporting by the New York Times, a number of former Apexus employees have filed complaints alleging that Apexus works behind the scenes with hospitals to boost drug sales through the 340B program, to generate more revenue for itself. The Times has reported on allegations that Apexus has engaged in a variety of tactics, including: 

• Using its exclusive access to sales data “in ways to drive revenue for itself,” including through a “purchasing optimization team” created to help hospitals generate more sales through the 340B program; and 

• Advising providers to “mine” their records for potentially eligible patients as far back as 36 months. 

For more than 30 years, the 340B program has helped safety-net providers like rural community hospitals, critical access hospitals, and community health centers purchase outpatient prescription drugs at reduced prices from drug manufacturers at no cost to the taxpayer. Savings from the 340B program help providers expand critical services such as mental health care, substance-use disorder treatments, and emergency services, to support the most vulnerable patients in their community without the need for additional federal funding.  

Senator Welch has led efforts to lower health care costs and strengthen the 340B drug pricing program. Last week, Senator Welch led the introduction of the bicameral 340B Pharmaceutical Access To Invest in Essential, Needed Treatments & Support (PATIENTS) Act, legislation that would protect the 340B drug pricing program and ensure patients—especially those in lower income and rural communities—can continue care with providers who utilize the program.   

Read and download the full letter to Apexus CEO Chris Hatwig. 

###