Third Circuit Court
The federal government opted not to ask a federal appeals court to reconsider its opinion upholding three drug makers' restrictions on 340B pricing when their drugs are shipped to be dispensed by contract pharmacies.

Feds Pass on Asking Full Appeals Court to Reconsider Adverse 340B Contract Pharmacy Ruling and Vacate Enforcement Letters to Three Manufacturers

The federal government yesterday decided not to ask all 14 judges on the U.S. Third Circuit Court of Appeals in Philadelphia to review a three-judge panel’s unanimous January opinion upholding AstraZeneca, Novo Nordisk, and Sanofi’s restrictions on 340B pricing when their drugs are shipped to be dispensed by contract pharmacies.

Two other federal appeals courts are expected at any time to issue opinions regarding Eli Lilly’s 340B contract pharmacy conditions and Novartis and United Therapeutics’ conditions.

In a related development, the U.S. Health Resources and Services Administration said on its website this morning that its May 17, 2021, 340B program violation letters to AstraZeneca, Novo Nordisk, and Sanofi and its Sept. 22, 2021, letters telling them they were referred to the Department of Health and Human Services Office of Inspector for civil monetary penalties “have been vacated” by the Third Circuit Court’s decision.

“HHS has been enjoined from enforcing against” the three companies “its reading of Section 340B as requiring delivery of discounted drugs to an unlimited number of contract pharmacies,” HRSA said.

It is thought to be HRSA’s first public acknowledgement that a court has barred it from enforcing its interpretation against a drug company or companies.

The three-judge panel ruled Jan. 30 that “Congress never said that drug makers must deliver discounted Section 340B drugs to an unlimited number of contract pharmacies.”

“By trying to enforce that supposed requirement, the government overstepped the statute’s bounds,” the judges said.

The original due date for a petition for a rehearing was March 16. On Feb. 26, the federal defendants asked for a 30-day extension of time, to April 17, which the Third Circuit Court granted on Feb. 28.

As it hopes for a more positive outcome in the two remaining appellate cases, the government’s remaining move is to ask the U.S. Supreme Court to review the Third Circuit decision. An online manual on the U.S. Justice Department website indicates that the government has 90 days from the date of the Third Circuit Court’s entry of judgement. That would be April 30—less than two weeks away. It might seek an extension of time to file.

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