Novo Nordisk’s claim that a federal legal advisory opinion on 340B contract pharmacy would make it unlawfully transfer its drugs to ineligible pharmacies and ineligible patients “is mere legerdemain” (slight of hand), government lawyers for U.S. Health and Human Services (HHS) Secretary Xavier Becerra told a federal district judge in Trenton, N.J., Tuesday.
Chief Judge Freda Wolfson should either dismiss Novo Nordisk’s claims against Becerra over whether it must offer 340B pricing on drugs dispensed by contract pharmacies, or the judge should summarily decide the case in Becerra’s favor, the U.S. Justice Department (DOJ) said in a May 11 filing in the case.
Novo Nordisk is scheduled to respond to DOJ’s latest motions on June 1.
The Danish drug company sued HHS in January, saying the department’s advisory opinion that manufacturers must offer their drugs at 340B prices no matter how entities choose to dispense them “is wrong, contrary to the statute, and inconsistent with the requirements of reasoned decision-making.”
DOJ’s reply brief closely tracks its arguments in similar lawsuits filed by Eli Lilly, Sanofi, and AstraZeneca against HHS over that department’s 340B contract pharmacy requirements. DOJ says HHS’s advisory opinion is not reviewable, and even if it were, Novo Nordisk’s claims against it are without merit.
In this brief and its brief last week in AstraZeneca’s case against HHS, DOJ points out that, 25 years ago, Pharmaceutical Research and Manufacturers of America (PhRMA, which both Novo Nordisk and AstraZeneca belong to) sued HHS over its original 340B contract pharmacy guidelines in 1996. PhRMA withdrew its suit. A federal district judge then dismissed PhRMA’s complaint.
An exhibit DOJ attached to its brief in the Novo Nordisk case includes a May 7, 1996 letter from Ciro Sumaya, then head of the U.S. Health Resources and Services Administration (HRSA), to then PhRMA General Counsel and Senior Vice President Russell Bantham.
Sumaya pointed out to Bantham that the 340B legislation would benefit “a very small percentage of the covered entities” if it was limited “to only those entities which use in-house pharmacies.”
“Therefore, recognizing the congressional mandate that all covered entities wishing to participate in the program have access to such discount pricing,” Sumaya said the office within HRSA that administered the 340B program during that period “does not recognize a distinction in a manufacturer’s obligation based on the manner in which entities purchase and dispense drugs.”
To address concerns about the potential for drug diversion “in the contract pharmacy approach,” HRSA’s 340B office “thought it wise to develop guidelines (with public input) which would recognize at least one arrangement for contract pharmacy services,” Sumaya said.
“If entities can propose other systems which would be equally as effective” in reducing the potential for drug diversion, he said, the 340B office “is very willing to review all proposed mechanisms.”
“If an eligible covered entity utilizing” the one-contract-pharmacy mechanism “requests to purchase a covered drug from a participating manufacturer, the statute directs the manufacturer to sell the drug at the discounted price,” Sumaya said. “If the entity directs the shipment to its contracted pharmacy, we see no basis to conclude that section 340B precludes this type of transaction or otherwise exempts the manufacturer from compliance” with the 340B pharmaceutical pricing agreement it signed.
DOJ said in its brief in the Novo Nordisk case that, in the quarter-century-old lawsuit, “The pharmaceutical industry quickly demonstrated its understanding both that HHS considered manufacturers to be obliged to honor contract-pharmacy dispensing models and that such transactions involve purchases by covered entities, not pharmacies.”
