UPDATE: May 21, 2021: On Thursday, drugmaker Eli Lilly filed a motion in an Indiana district court to halt 340B-related monetary penalties, three days after the Biden administration set a June 1 deadline for pharmaceutical companies to comply with new conditions in the drug discount program and allow hospital pharmacies access to discounted drugs.
The suit alleges a Monday letter from Diana Espinosa, acting head of the Health Resources and Services Administration, gives "no legal explanation or justification for the arbitrary June 1 deadline."
Lilly filed an almost identical lawsuit in January 2020. The Indianapolis-based pharma said it expected the government to follow the briefing schedule outlined in that suit before mandating compliance with 340B and forcing it to pay "substantial and irretrievable sums of money."
Should the court decide Lilly was required to extend discount pricing to contract pharmacies, Lilly said it would comply. "But," the motion states, "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 asked the district court to temporarily block HHS from moving against Lilly until the drugmaker's request for a preliminary injunction is resolved.
An HRSA spokesperson declined to comment on the suit.
- The U.S. Department of Health and Human Services has called out six pharmaceutical companies for violating rules under the 340B drug discount program, ordering them to repay affected healthcare providers for previous overcharges and warning of more penalties if they don't comply.
- Last July, some drugmakers stopped giving the 340B "ceiling" price — the maximum they can charge — on medicines sold to covered entities and dispensed through contract pharmacies. Others limited sales by requiring specific data or selling products only after a covered provider demonstrated 340B compliance, according to the Health Resources and Services Administration, which administers the program.
- In letters from acting HRSA administrator Diana Espinosa, the agency asked AstraZeneca, Eli Lilly, United Therapeutics, Sanofi, Novo Nordisk and Novartis give an update by June 1 on their plans to restart selling outpatient drugs covered at the 340B price to entities that dispense medications through contract pharmacies.
Hospitals and drugmakers have sparred for years over the 340B drug discount program that requires pharmaceutical companies to give discounts on outpatient drugs for facilities serving low-income communities.
The American Hospital Association along with five other groups in December filed a federal lawsuit against HHS, alleging the department failed to enforce 340B program requirements and allowed actions from drug companies that undermined the program. That lawsuit was later dismissed.
But with new HHS leadership now in charge, healthcare providers now seem to have an ally in the fight.
Previously, as California's Attorney General, newly minted HHS chief Xavier Becerra led a group of states pushing the agency late last year to force drugmakers to comply with the law.
Healthcare provider groups supported the move after disclosing last year that an increasing number of drug companies were refusing to offer discounts to eligible hospitals.
"The denial of these discounts has damaged providers and patients and must stop. It is vital that these companies immediately begin to repay the millions of dollars owed to these providers," 340B Health CEO Maureen Testoni said in a statement.
In separate letters to drugmakers, the HRSA said their policies violated the statute and resulted in overcharges that need to be refunded. The companies must contact all impacted entities and pursue mutually agreed upon refund arrangements, according to the letters.
Hospitals in the 340B program provide 60% of all uncompensated care in the U.S. and 75% of all hospital care to Medicaid patients, according to 340B Health.