Federal judges yesterday issued orders in four lawsuits over 340B program contract pharmacy policy.

New Developments in 340B Contract Pharmacy Lawsuits

Federal courts in Delaware, Indiana, and New Jersey yesterday issued orders related to the federal government’s May 17 demand to six drug manufacturers to immediately resume unrestricted 340B pricing on drugs shipped to contract pharmacies.

The government last week asked AstraZeneca, Eli Lilly, Novartis, Novo Nordisk, Sanofi, and United Therapeutics to provide an update by next Tuesday, June 1, on their plans for resuming 340B pricing when covered entities contract with outside pharmacies. It said decisions about whether to impose civil fines on the companies of up to $5,883.00 for each instance of 340B overcharging would be based on each company’s willingness to comply.

Eli Lilly, AstraZeneca, Sanofi, and Novo Nordisk began filing suits in January to stop the U.S. Health and Human Services Department (HHS) from enforcing its Dec. 30 legal advisory opinion that their 340B contract pharmacy pricing denials were at odds with the 340B statute. Lilly and Sanofi also are suing to stop HHS from implementing its 340B program administrative dispute resolution (ADR) system.

Lilly Developments

Lilly last week asked U.S. District Judge Sarah Evans Barker in Indianapolis for a preliminary injunction and temporary restraining order (TRO) barring HHS “from taking any adverse action against Lilly” related to HHS’s advisory opinion or HRSA’s demand letter, until the judge rules on the validity of the advisory opinion.

Barker yesterday scheduled a hearing for this Thursday, May 27, on Lilly’s TRO request. “The court will rule as quickly as possible on the motion as it relates to the underlying merits of this case,” the judge said. Barker denied a request by six national hospital groups to participate in Tuesday’s hearing. She scheduled a June 16 hearing on Lilly’s request for a preliminary injunction.

In March, Barker granted Lilly’s motion for a preliminary injunction stopping HHS from implementing or enforcing its 340B ADR regulations against Lilly.

AstraZeneca: “Hundreds of Millions” Monthly in Fines Possible

U.S. Judge Leonard Stark of the District of Delaware yesterday denied AstraZeneca’s request for a stay in proceedings but granted its request to expedite a final decision in the case. Stark previously had scheduled a June 7 hearing on AstraZeneca’s for summary judgement in its favor and the government’s motion either to dismiss the case or to grant summary judgement in its favor. Stark yesterday moved up that hearing to this Thursday, May 27.

Also yesterday, American Hospital Association (AHA), 340B Health, America’s Essential Hospitals, the Association of American Medical Colleges (AAMC), Children’s Hospital Association (CHA), and ASHP (American Society of Health-System Pharmacists) filed a friend of the court brief in support of the government’s position. Last month, Stark denied the groups permission to participate in the lawsuit as litigants on an equal footing with AstraZeneca and the government.

AstraZeneca last week asked Judge Stark in Wilmington, Del., for either a short administrative stay or an expedited final ruling in its lawsuit challenging HHS’s advisory opinion.

In a sworn declaration appended to its May 19 motion, the AstraZeneca executive responsible for oversight of the 340B program told Stark that, “given the sheer number of 340B sales that we make every year,” AstraZeneca “could face hundreds of millions of dollars per month” in 340B program civil monetary penalties for overcharges. The figure “does not include potential reimbursement requests from covered entities,” it noted.

It was one of the first known public statements by one of the four companies suing HHS quantifying the potential financial stakes for the manufacturers.

Sanofi and Novo Nordisk Developments

Sanofi’s lawsuit challenging the advisory opinion and ADR regulations, and Novo Nordisk’s suit challenging just the advisory opinion, both are being heard by Chief Judge Freda Wolfson of U.S. District Court in Trenton, N.J.

Last week Thursday, Sanofi asked Wolfson to stay HHS’s June 1 deadline for the company to disclose its plan for complying with HHS’s May 17 directive to resume 340B pricing on drugs shipped to contract pharmacies, and to expedite its final ruling in the case.

Novo Nordisk filed similar motions last Friday.

Wolfson yesterday in both cases ordered the government to respond by no later than today, May 25, to Sanofi and Novo Nordisk’s request for stays. She also ordered both companies by no later than today to amend their complaints against the government “to add additional factual allegations” related to HHS’s May 17 letters to the companies.

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