Drug manufacturer Boehringer Ingelheim (BI) sued the federal government this afternoon in federal district court in Washington, D.C., in defense of its policy of denying hospitals 340B drug discounts when hospitals use contract pharmacies.
BI is the seventh manufacturer to file such a suit in defense of such a policy. The others are Astra Zeneca, Lilly, Novartis, Novo Nordisk, Sanofi, and United Therapeutics. An eighth manufacturer, Merck, on Sept. 1 began denying 340B discounts to hospitals that use contract pharmacies if the hospitals decline to provide their 340B contract pharmacy claims data. That policy also is eventually expected to lead to an eighth lawsuit by a drug manufacturer this year.
BI told 340B Report this afternoon, in response to an inquiry about the status of the government’s finding that BI’s contract pharmacy policy is against the law, that it filed the lawsuit.
“Boehringer Ingelheim filed a lawsuit to defend its policy regarding the use of contract pharmacies in the 340B drug discount program,” BI Senior Vice President, Market Access Chris Marsh said. “We believe that [the U.S. Health Resources and Services Administration] HRSA’s position on our updated policy is based on an incorrect interpretation of the 340B drug pricing law, and we are confident that the courts will agree with us.”
HRSA has a policy against commenting on litigation it is involved in.
The American Hospital Association, which has condemned manufacturers’ 340B pricing denials involving contract pharmacy, declined comment at this time.
BI’s complaint filed with the court says its case “is about an agency attempt to dramatically expand a federal program in a manner that is divorced from the statutory text.”
“The 340B statute does not require manufacturers to provide 340B discounted drugs
to contract pharmacies,” the complaint says. “HRSA lacks any authority to impose such a requirement.” HRSA’s interpretation of the 340B statute “is not entitled to deference because Congress has not delegated authority to the agency to address contract pharmacy issues, and because HRSA has altered its interpretation of the statute without engaging in notice-and-comment or other meaningful process.”
BI’s complaint says HRSA’s Oct. 4 letter informing BI it was violating the 340B statute “is arbitrary and capricious for a number of reasons.” The complaint says HRSA interpretation of the statute as requiring that manufacturers provide 340B discounted drugs to an unlimited number of contract pharmacies “amounts to a legislative rule” that HRSA lacks authority to impose. It says “HRSA’s actions amount to a confiscatory taking” in violation of the Fifth Amendment.
BI seeks an order striking down and vacating HRSA’s Oct. 4 letter finding the company in violation of the 340B statute, a declaration that “that Boehringer Ingelheim is not required to provide 340B discounted drugs to anyone other than a covered entity, and specifically not to contract pharmacies,” an injunction preventing HRSA from implementing or enforcing its Oct. 4 findings against BI “through ADR proceedings or otherwise,” and an injunction preventing HRSA from “from imposing civil monetary penalties against Boehringer Ingelheim” based on the findings.
