In a major escalation of the fight over 340B contract pharmacy, drug manufacturer AstraZeneca late yesterday asked a federal court to declare that it “is not required to offer 340B discounts to contract pharmacies.”
As we went to press, we learned that manufacturers Eli Lilly and Co. and Sanofi yesterday filed similar suits in different federal district courts.
AstraZeneca’s Jan. 12 lawsuit against outgoing U.S. Health and Human Services (HHS) Secretary Alex Azar came just hours before health care providers can begin filing petitions today for redress over alleged denials of 340B pricing on contract pharmacy drugs with the new 340B administrative dispute resolution system. One or more covered entity claims are expected to be filed today.
AstraZeneca pointed out in its legal complaint that it faces potential civil monetary penalties of up to $5,000 for each occurrence of a denial of 340B pricing, could be kicked out of the Medicare and Medicaid programs, and could face False Claims Act penalties. It said that “every day” that HHS’s Dec. 30 legal advisory opinion that its and other manufacturers’ denials of 340B discounts on contract pharmacy drugs are illegal “remains on the books, AstraZeneca is exposed to a threat of greater and greater potential liability.”
AstraZeneca asked the court to declare the advisory opinion illegal and set it aside, to declare that the company does not have to offer 340B discounts to contract pharmacies, to enjoin HHS from enforcing the advisory opinion and all actions by HHS inconsistent with that injunction, and to order the U.S. Health Resources and Services Administration (HRSA) to post a public notice by AstraZeneca on HRSA’s website announcing the company’s policy of recognizing just one contract pharmacy per covered entity for those without an in-house pharmacy. It seeks preliminary and permanent injunctions.
AstraZeneca’s complaint cites 340B Report’s July 9 article about HRSA’s statement to us that, while its 2010 340B contract pharmacy guidance remains in effect, the guidance is not legally enforceable. HRSA has complained over the past few years that Congress needs to give it broad regulatory over 340B. However, over the past few months, HRSA and HHS have taken a more aggressive stance against the manufacturers. Many 340B provider groups have argued that Azar’s and HRSA’s actions have been woefully inadequate.
AstraZeneca, Lilly, and Sanofi’s lawsuits mean that HHS is now being sued by both sides in the 340B contract pharmacy battle. HIV/AIDS clinics, community health centers, and hospitals have sued it for relief from manufacturers’ contract pharmacy actions.
