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A federal district judge in Washington, D.C., put drug manufacturer Merck’s 340B contract pharmacy lawsuit against the federal government on hold pending a related federal appeals court decision.

340B REPORT SPONSOR SPOTLIGHT

Judge Issues Stay in Merck’s 340B Contract Pharmacy Lawsuit

A federal district judge in Washington, D.C., put drug manufacturer Merck’s 340B contract pharmacy lawsuit against the federal government on hold until after a federal circuit court in Washington rules in Novartis and United Therapeutics’ 340B contract pharmacy cases.

Lawyers for Merck and the U.S. Department of Health and Human Services (HHS) last week Tuesday filed a joint motion to stay further proceedings in Merck’s case. Merck disputes the legality of HHS’s finding in Maythat the company’s conditions on 340B pricing when hospitals and health centers use contract pharmacies are illegal.

Dabney Friedrich, the judge assigned to Merck’s case, is the same judge who decided Novartis and UT’s consolidate cases in November 2021. She struck down the 340B program violation letters they got in May 2021, holding that the 340B statute does not stop manufacturers from imposing conditions on 340B pricing.

Friedrich declined, however, to rule on whether Novartis and UT’s policies were legal. She said any future federal enforcement action against the companies’ 340B contract pharmacy policies “must rest on a new statutory provision, a new legislative rule, or a well-developed legal theory that Section 340B precludes the specific conditions at issue here.”

The two companies and the federal government appealed. The U.S. Appeals Court for the District of Columbia Circuit has scheduled arguments in the two cases for Oct. 24.

Friedrich on Sept. 13 stayed further proceedings in Merck’s case pending the D.C. circuit’s ruling in the Novartis and UT cases. She told Merck and the federal government to report back to her within 14 days of that decision.

Friedrich also is the judge assigned to drug manufacturer Boehringer Ingelheim’s and manufacturer consultant Kalderos’ separate 340B contract pharmacy-related lawsuits against the government. Those two cases also are on hold.

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