Just over 850 hospitals in the 340B program asked the federal government yesterday to appeal a judge’s Nov. 5 ruling that halted enforcement actions against two drug companies that deny 340B pricing when hospitals and others use contract pharmacies. They also asked the government to start punishing other manufacturers with similar policies.
The letter asks Becerra to challenge U.S. District Judge Dabney Friedrich’s decision to set aside the U.S. Health Resources and Services Administration’s (HRSA) May 17 letters telling Novartis and United Therapeutics (UT) their restrictions on 340B contract pharmacy were illegal and resulted in overcharges that must be repaid, or the companies could face civil fines.
Friedrich ruled that the 340B statute does not prohibit drug makers from attaching any conditions to 340B sales. But, she said, the statute does not permit all such conditions. Any new enforcement action against Novartis and UT would need to be based “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,” Friedrich said.
Novartis and UT have not appealed her decision which is largely viewed as favorable to the companies. Friedrich recently gave the government extensions of time in two other 340B contract pharmacy lawsuits that she also is hearing to decide whether to appeal her joint ruling in the Novartis and UT’s cases.
One of those other two cases was filed by drug industry vendor Kalderos. On Dec. 15, the government asked Friedrich to stay further proceedings in Kalderos’ suit until the government decides whether to appeal her decision in the Novartis and UT’s cases and, if it does appeal, to keep the stay in place until the U.S. Court of Appeals for the District of Columbia Circuit resolves the Novartis and UT’s cases.
The 340B hospitals’ letter to Becerra notes that two other federal judges—one in Lilly’s contract pharmacy lawsuit, the other in Sanofi and Novo Nordisk’s lawsuits—”have ruled that drug companies are violating the law and do not have the right to unilaterally impose these types of restrictions on 340B discounts. We urge HRSA to move forward expeditiously with enforcement consistent with those courts’ rulings.”
The hospitals “strongly urge the government to appeal or otherwise respond to” Friedrich’s decision in the Novartis and UT cases “and continue to press for a restoration of 340B pricing as rapidly as possible.”
According to a 2020 U.S. Government Accountability Office report, there were 2,523 hospitals participating in 340B as of 2019. More than 1,400 hospitals and health systems belong to 340B Health, the group says.