Drug manufacturer Astra Zeneca and the federal government both want a federal district judge in Delaware to rule quickly in the drug company’s lawsuit over the government’s 340B contract pharmacy requirements.
The two sides, however, are miles apart on why U.S. District Judge Leonard Stark’s ruling is so urgent. They laid out their reasoning in a joint status report to the judge on Monday.
AstraZeneca is challenging the government’s May 17 finding that its denials of 340B pricing when covered entities use contract pharmacies is illegal and must stop immediately. HRSA has also told AstraZeneca that it must repay entities for overcharges. The government in September initiated civil monetary penalty (CMP) proceedings against AstraZeneca due to its continued refusal to comply. Meanwhile, on separate track from the lawsuit, four 340B administrative dispute resolution (ADR) proceedings against AstraZeneca over its contract pharmacy actions are getting underway.
AstraZeneca told Stark that the ADR and CMP proceedings “threaten to inflict imminent harm” on it. “For every month that AstraZeneca does not acquiesce to defendants’ erroneous view of the 340B statute, it risks hundreds of millions of dollars in CMPs,” it said. “And AstraZeneca simultaneously faces an unconstitutionally structured ADR process.” These administrative actions are causing significant and? irreparable damage to AstraZeneca’s reputation, the company said.
The government told Stark he should rule expeditiously “due to the continuing overcharges and accruing harms caused by plaintiff’s unlawful refusal to honor its statutory obligations.”
The U.S. Health Resources and Services Administration’s (HRSA) “most-recent data show that plaintiff is continuing to sell 340B drugs directly to covered entities in their 340B accounts at full commercial pricing (wholesale acquisition cost),” the government said. “In August 2021 alone, HRSA documented $2.5 million in overcharges, specifically on AstraZeneca’s drugs, to covered entities directly in their 340B accounts.”
“These continuing overcharges threaten the viability of resource- strapped safety-net providers, as documented in the administrative record,” it continued. “[We] respectfully contend that an expedited ruling is preferable so that covered entities can once again access the discounts they have received for decades and to which they are statutorily entitled.”
In an oral order on Tuesday, Stark acknowledged both sides’ requests for a quick ruling but gave no indication he is going to give them what they want. He ordered both sides to submit another joint status report no later than Nov. 12 “regarding any case developments.”
