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Merck did not immediately comment on the governnment's referral yesterday to the HHS Inspector General for possible imposition of civil fines over the company's 340B contract pharmacy restrictions.

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HRSA Refers Merck to HHS Inspector General Over its 340B Contract Pharmacy Policy

The U.S. Health Resources and Services Administration yesterday referred drug manufacturer Merck to the Department of Health and Human Services Office of Inspector General for possible imposition of civil fines over Merck’s 340B contract pharmacy restrictions.

Public Health Services Lt. Cmdr. Emeka Egwim, Director of HRSA’s Office of Pharmacy Affairs, sent Merck a letter yesterday notifying it about the referral to OIG. Merck did not immediately respond to a request for comment.

Eighteen drug manufacturers including Merck have imposed conditions on 340B pricing when covered entities contract with pharmacies to dispense covered outpatient drugs. HRSA has told Merck and 10 others their policies are illegal and must end or the companies could face penalties of up to $6,323 for each instance of overcharging. AbbVie and Amgen were the last to get such letters.

Merck is the eighth manufacturer HRSA has referred to OIG for possible imposition of fines for refusal to withdraw its pricing conditions. Merck also is one of the eight manufacturers suing HRSA over getting a 340B program violation notice. 

340B Report has learned that OIG is waiting for the outcomes of federal appeals court rulings about the legality of HRSA’s 340B program violation letters to manufacturers before deciding whether to fine manufacturers. Boehringer Ingelheim was the last manufacturer HRSA referred to OIG, in late March.

The federal appeals court in Washington, D.C., is scheduled to hear arguments Monday morning in Novartis and United Therapeutics’ lawsuits against HHS and HRSA. Another federal appeals court in Chicago will hear arguments in Lilly’s case Oct. 31 and a third federal appeals court in Philadelphia will hear oral arguments in Sanofi, Novo Nordisk, and Astra Zeneca’s cases on Nov. 15. 340B Report will be covering each of the hearings and will provide the latest information to our readers.