Three drug companies have filed separate lawsuits to preserve their ability to restrict offerings of 340B-discounted drugs to contract pharmacies. The lawsuits, filed in early January in different federal courts, all share the same goal: getting rid of an advisory opinion filed by the Department of Health and Human Services’ (HHS’) general counsel that says drug companies must offer 340B drugs to contract pharmacies.
The companies argue that the advisory opinion alters the statute for the 340B program, which requires manufacturers to offer discounted products to safety net hospitals and other providers in exchange for participation in Medicare and Medicaid.
In its lawsuit, filed in the United States District Court for the Southern District of Indiana, Eli Lilly argues that “Nothing in the statute allows, let alone mandates, the use of contract pharmacies or that manufacturers respect an unlimited number of covered entity–contract pharmacy relationships. In fact, the opposite is true.”
In its complaint filed in the United States District Court for the District of Delaware, AstraZeneca went so far as to say the agreements between 340B hospitals and contract pharmacies have “transformed the 340B program from one intended to assist vulnerable patients into a multibillion dollar arbitrage scheme that benefits national for-profit pharmacy chains and other for-profit intermediaries.”
The companies are also concerned that the alternative dispute resolution board created by the Health Resources and Services Administration (HRSA) in early December 2020 will rely on the advisory opinion. In its filing, filed in the United States District Court for the District of New Jersey, Sanofi is concerned that because the board consists of HHS representatives, it will “treat the advisory opinion as binding in any ADR proceeding, almost certainly find that Sanofi’s integrity initiative violates Section 340B as interpreted by HHS, and potentially impose crippling sanctions.”
These lawsuits come on the heels of drug companies reducing the number of pharmacies permitted access to drug discounts. The companies say their actions are focused, at least in part, on preventing discounts being given for the same drug twice. It’s possible other major drug companies will file their own lawsuits against HHS, similar to the ones already filed by Sanofi, AstraZeneca, and Eli Lilly.
This follows action taken by the American Hospital Association (AHA) and others, who sued HHS to force the agency to suppress the drug manufacturers’ moves. AHA, along with five other groups and three individual systems, also sent letters to drug companies in early January 2021, asking them to reinstate sending the discounted products to their pharmacies and reimburse facilities for damages.