A federal district judge in Indianapolis late this afternoon declined to temporarily restrain federal health officials from requiring drug maker Eli Lilly, based on a May 17 enforcement letter, to provide 340B discounts on drugs dispensed by contract pharmacies. | Shutterstock

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Late Breaking Developments in Lilly and AstraZeneca’s 340B Contract Pharmacy Lawsuits

A federal district judge in Indianapolis late this afternoon declined to temporarily restrain federal health officials from requiring drug maker Eli Lilly, based on a May 17 enforcement letter, to provide 340B discounts on drugs dispensed by contract pharmacies. Nonetheless, the judge plans to proceed with a June 16 hearing on Lilly’s request for a preliminary injunction to block the enforcement of a Dec. 30 HHS advisory opinion and allow it to amend its case to also challenge the May 17 letter.

U.S. District Judge Sarah Evans Barker ruled from the bench that the letter poses “no irreparable harm” to Lilly, and that the company only needs to provide a plan to HRSA for restoring discounts. Lilly is suing to stop HHS from enforcing against it a Dec. 30 advisory opinion that the 340B statute requires Lilly and other drug manufacturers that participate in 340B to offer their products at or below 340B ceiling prices when covered entities use contract pharmacies.

The May 17 letter issued by HHS’s Health Resources and Services Administration (HRSA) determined that Lilly’s restrictions on 340B pricing to covered entities that use contract pharmacies resulted in overcharges and violated the 340B statute. Five other manufacturers with similar policies got similar letters. HRSA asked the companies to tell it by next Tuesday, June 1, what their plans are to resume unrestricted 340B pricing.

Barker upbraided the government for giving the companies a reporting deadline immediately after the Memorial Day holiday. She called it inequitable, unfair, and insensitive, and gave Lilly until June 10 to submit its plan to HRSA. She also agreed to a request by government lawyers for a short extension of its next briefing deadline.

Barker said a previously scheduled June 16 hearing on Lilly’s motions for a preliminary injunction against HHS and HRSA’s enforcement of the December advisory opinion against it remain on track. She also agreed to allow Lilly to amend its filing to address what the company believes is an unlawful May 17 enforcement letter.

Meanwhile this afternoon, a federal district judge in Wilmington, Del., held a hearing in manufacturer AstraZeneca’s case also challenging the advisory opinion.

U.S. District Judge Leonard Stark indicated through his questioning that he is weighing whether to rule that HHS’s conclusion that manufacturers must offer 340B pricing when entities use contract pharmacies is just one of several possible, reasonable ways to interpret the 340B statute, and not the only possible conclusion. This could be problematic for the government’s case and will likely cause significant concern to the 340B provider community.

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