The federal judge considering drug manufacturer Sanofi’s motion for protection from 340B dispute resolution proceedings wants to hear more about a different court's recent decision to grant Eli Lilly such protection.

340B Dispute Resolution Injunction Is Having Ripple Effects

The federal judge considering drug manufacturer Sanofi’s motion for protection from 340B dispute resolution proceedings asked the company and the federal government last Wednesday to brief her on a different federal judge’s order the day before granting drug company Eli Lilly the same protection that Sanofi wants.

Sanofi and the government responded jointly on Sunday. They asked Chief Judge Freda L. Wolfson of U.S. District Court for the District of New Jersey to temporarily suspend Sanofi’s request for a preliminary injunction to stop the U.S. Health and Human Services Department (HHS) from convening 340B administrative dispute resolution (ADR) panels involving Sanofi.

The two sides agreed to streamline their proceedings before Wolfson in order to skip past an injunction and expedite an opinion from her on the legality and constitutionality of the 340B ADR system, and on the legality of HHS December advisory opinion that Sanofi and other manufacturers must offer 340B ceiling prices on drugs dispensed by contract pharmacies. Their proposed schedule indicates the decision would come sometime after June 21.

Sanofi and the government said they would address the Lilly decision during the accelerated proceedings. On March 16, U.S. District Judge U.S. District Judge Sarah Evans Barker of the Southern District of Indiana granted Lilly’s motion for a preliminary injunction. Barker said she did so because Lilly was likely to ultimately win its argument that HHS violated procedural requirements when it finalized the ADR rule.

In a related development yesterday, the U.S. Health Resources and Services Administration (HRSA) noted at the top of its 340B ADR webpage that it is currently enjoined from enforcing its ADR regulations against Lilly.

340B covered entities and drug manufacturers are waiting to see whether new HHS Secretary Xavier Becerra decides to appeal Barker’s decision or to withdraw and reissue the ADR regulations. If Becerra picks the latter course, he next will have to decide whether to reissue the regulations rapidly as they are written now, or propose revisions to the rule.

Groups representing covered entities are already preparing to write and submit comments in the event Becerra decides to withdraw and reissue the ADR rule.

There have been no significant developments in the suit Pharmaceutical Research and Manufacturers of America’s (PhRMA) filed against the government in January seeking a permanent injunction prohibiting HHS from implementing or enforcing the ADR rule. PhRMA also wants a federal district judge in Maryland to declare HHS’s 340B manufacturer audit guidelines illegal.

PhRMA, Lilly, Sanofi, AstraZeneca, and Novo Nordisk are each suing HHS over its 340B contract pharmacy requirements. Lilly and Sanofi both asked for preliminary injunctions against the 340B ADR process, and PhRMA for a permanent injunction.

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