A federal district judge on Friday granted the federal government’s motion to stay proceedings in drug industry vendor Kalderos’ 340B contract pharmacy suit.
The government had asked U.S. District Judge Dabney Friedrich of the District of Columbia to pause Kalderos’ lawsuit pending a federal appeals court’s ruling in drug manufacturers Novartis and United Therapeutics’ (UT) 340B contract pharmacy suits. The government filed its notice of appeal in late December. It could take months for the circuit court to issue an opinion.
The government is challenging Friedrich’s Nov. 5 joint ruling in the Novartis and UT cases that the 340B statute does not “prohibit manufacturers from placing any conditions on covered entities.” Friedrich however also held that the 340B statute does not permit all such conditions.
Kalderos sued the government in October 2021. It is challenging the government’s position that manufacturers may not unilaterally impose conditions on 340B drug purchases. Friedrich is the judge assigned to Kalderos’ case. She also is the judge in Boehringer Ingelheim’s 340B contract pharmacy lawsuit. The two sides in that case agreed to stay proceedings pending the circuit court’s decision in the Novartis and UT cases.
Kalderos told Friedrich she should deny the government’s request for a stay because granting one would be unnecessary and premature. Kalderos said it will suffer harm if its case doesn’t proceed, whereas the government hasn’t shown clearly it will suffer hardship.
Kalderos offers a service called 340B Pay to let drug companies provide 340B pricing as a post-purchase rebate instead of as an up-front discount. For 340B-purchased drugs dispensed by contract pharmacies, covered entities must give Kalderos their claims data for review to get the rebates.
In November 2020, 217 U.S. House members (173 Democrats and 44 Republicans) asked former U.S. Health and Human Services (HHS) Secretary Alex Azar in a letter “to make clear that manufacturers may not implement a 340B rebate model without approval.”
In January 2021, U.S. Sens. Patty Murray (D-Wash.) and Tammy Baldwin (D-Wis.) told Azar in a letter they “believe a rebate model violates both the spirit and the letter of the law” and called on HHS “to take action to prevent its implementation.” Murray chairs the Health, Education, Labor, and Pensions Committee (HELP) and the Labor, Health and Human Services, and Education Appropriations Subcommittee. The HELP committee has jurisdiction over the 340B program, and the Labor-HHS-Education appropriations subcommittee funds the U.S. Health and Resources Services Administration (HRSA), the agency that oversees the 340B program.