Late on Friday, June 18, 2021, the United States Department of Health and Human Services (HHS) withdrew its December 30, 2020, 340B advisory opinion via a legal filing, in an attempt to “avoid confusion and unnecessary litigation,” a week after Judge Leonard Stark denied HHS’ motion for summary judgment in a lawsuit brought by AstraZeneca over the 340B program.
Readers may recall that AstraZeneca filed a lawsuit against HHS over the December 30, 2020, advisory opinion that stated AstraZeneca and other pharmaceutical companies were violating federal law for not providing discounted drugs to contract pharmacies. AstraZeneca argued that the advisory opinion violated federal law and that HHS did not have the authority to issue it.
HHS had filed a motion to dismiss the lawsuit, arguing that the advisory opinion just restated a position the federal government has held throughout the entirety of the 340B program. In his order denying HHS’ motion, Stark said the opinion was “explicitly an exercise in statutory interpretation” and that AstraZeneca has a valid challenge to the advisory opinion because it could have a financial impact on AstraZeneca.
Now that HHS has withdrawn the advisory opinion, HHS believes the lawsuit is moot. However, while the agency has withdrawn the advisory opinion, it has not withdrawn the letters it sent to AstraZeneca and five other pharmaceutical companies in May 2021, asking them to end the restrictions to contract pharmacies.
Eli Lilly Lawsuit
Eli Lilly filed a lawsuit in response to the Health Resources and Services Administration (HRSA) letter in May 2021, seeking an extension of the June 1st deadline imposed in the letter. In the alternate, Lilly asked that the government hold off on issuing any penalties until the resolution of the case. The government has thus far declined and Lilly is awaiting a ruling from a federal judge in response to the suit.
Lilly’s motion in The United States District Court for the Southern District of Indiana states that the letter from Espinosa “provides no legal explanation or justification for the arbitrary June 1 deadline.”
In its motion, Eli Lilly went on to note that “If the Court ultimately decides Lilly was required to extend 340B pricing to contract pharmacies, Lilly will comply with that decision. Conversely, if the Court ultimately decides manufacturers are not required to extend 340B pricing to contract pharmacies, then we surely expect the government will comply with that decision. But there is no explanation or justification for the government’s attempt to make Lilly pay now, other than to evade this Court’s review and leave Lilly without recourse for such payments.”
Lilly has also taken issue with “new conditions HHS and HRSA are trying to impose — give an unlimited number of for-profit businesses discounted product, no questions asked, or be subjected to crippling penalties and the potential expulsion from some of the largest government programs in existence — were certainly not the terms of the 340B program when Lilly signed.”
In the motion, Lilly also alludes to its belief that the letter from HRSA is a political solution to a real legal issue, saying, “This bow to political pressure over legal reasoning should come as no surprise, as the government has already (and repeatedly) made clear its willingness to placate the cries of political actors to ‘take action’ against drug manufacturers.
Eli Lilly is seeking an Order that temporarily prevents HHS from taking any adverse action against the company until the Court resolves Lilly’s request for a preliminary injunction.
Reactions
“Withdrawal of the December 2020 advisory opinion eliminates an unnecessary distraction created by drug company efforts to challenge the government’s authority to enforce the law,” said Maureen Testoni, president and CEO of the advocacy group 340B Health, in a statement.