The timing of the government’s forthcoming decision on the legality of Merck’s 340B contract pharmacy policy, and the grounds for its decision, are two big questions hovering over the 340B program.

Attention Turns to Merck and AstraZeneca After Courts’ 340B Contract Pharmacy Rulings

The smoke is still clearing from three federal district judges’ recent decisions in drug manufacturers Lilly, Sanofi, Novo Nordisk, Novartis, and United Therapeutics’ 340B contract pharmacy lawsuits. In the rulings’ wake, we are keeping close tabs on what happens next to Merck’s contract pharmacy policy and to AstraZeneca’s contract pharmacy lawsuit.

What Will HRSA do About Merck’s Policy?

The timing of the government’s forthcoming decision on the legality of Merck’s 340B contract pharmacy policy, and the grounds for its findings, are two big questions hovering over the 340B program.

A U.S. Health Resources and Services Administration (HRSA) spokesperson said yesterday, “HRSA is continuing to engage with Merck and will evaluate next steps as needed.”

A Merck spokesperson, however, said yesterday, “We’ve not received any communications since [the company’s 340B program integrity initiative] began.”

Merck is the eighth and most recent drug manufacturer to impose restrictions on 340B discounts when covered entities use contract pharmacies to dispense drugs to patients. Its policy applies to hospitals only and took effect on Sept. 1.

Merck also is the only one of the eight that has not yet received a letter from HRSA telling it that its restrictions on 340B pricing are illegal and must end immediately, or the company could face civil monetary penalties.

Six manufacturers—AstraZeneca, Lilly, Novartis, Novo Nordisk, Sanofi, and United Therapeutics—got nearly identical cease-and-desist letters from HRSA on May 17 about their contract pharmacy restrictions. The seventh, Boehringer Ingelheim (BI), got its letter on Oct. 4.

Since Oct. 29, federal district judges have partially vacated and set aside HRSA’s letters to Lilly, Novo Nordisk, and Sanofi and completely vacated and set aside HRSA’s letters to Novartis and United Therapeutics.

Today is the 69th day since Merck implemented its contract pharmacy policy (Sept. 1). That’s five days longer that the 64 days it took HRSA to send BI a 340B program violation letter (BI’s policy took effect on Aug. 1, and HRSA sent its letter on Oct. 4).

Hospital groups want HRSA to take swift enforcement action against Merck. But given the court rulings in the Lilly, Sanofi, Novo Nordisk, Novartis, and United Therapeutics cases, a HRSA violation letter to Merck likely would be different from those that the other seven manufacturers got. Drafting a letter to Merck that satisfied the three different judges’ opinions and orders could be a challenge.

When and How Will Judge Rule in Astra’s Case?

Stakeholders meanwhile also are paying close attention to what happens next in AstraZeneca’s 340B contract pharmacy lawsuit.

U.S. District Judge Leonard Stark is the only judge left who has not yet ruled on a 340B contract pharmacy lawsuit that is ripe for a decision.

The government and AstraZeneca have a deadline this Friday, Nov. 12, to file a joint status report “regarding any case developments” in Astra’s suit challenging the government’s position that the 340B statute requires AstraZeneca to honor covered entities’ contract pharmacy arrangements. The parties filed their last report on Oct. 25. That was four days before the decision in Lilly’s contract pharmacy suit and 11 days before the two joint decisions in Sanofi and Novo Nordisk’s cases and in Novartis and United Therapeutics’ cases.

The government and AstraZeneca early last week already began sparring, in dueling letters to U.S. District Judge Leonard Stark, about the applicability of U.S. Senior District Judge Sarah Evans Barker’s Oct. 29 decision in Lilly’s case to AstraZeneca’s lawsuit. Look for more of the same in AstraZeneca’s and the government’s status report due on Friday, focused this time on the implications of the Sanofi/Novo Nordisk and Novartis/United Therapeutics decisions.

AstraZeneca and the government asked Stark in their last status report to expedite his ruling. Stark acknowledged their requests in his Oct. 26 oral order directing the two sides to file another status report by this week Friday. At the conclusion of Oct. 19 arguments in the case, Stark said he was “not persuaded there is any urgency” for him to rule expeditiously. The cavalcade of decisions in the other contract pharmacy cases might change that.

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