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RWC-340B is dropping is lawsuit that helped prod HRSA to issue long-delayed 340B dispute resolution rules.

Ryan White Clinics for 340B Access Is Dropping its 340B Dispute Resolution Lawsuit

Ryan White Clinics for 340B Access is dropping its lawsuit that, together with a related case, led federal health officials to issue long-delayed dispute resolution rules for the 340B program in December 2020.

RWC-340B, five co-plaintiff 340B covered entities, and federal defendants the Department of Health and Human Services and Health Resources Services Administration filed a joint motion to dismiss the case Jan. 13. The judge is expected to grant the request.

HHS and HRSA said in a court filing last month that the case should be dismissed because HRSA issued the 340B administrative dispute resolution final rule and was in the middle of proposing a replacement with notice and comment. The plaintiffs said in the same joint filing they needed time to assess the replacement rule’s impact on the case. The judge gave the two sides until Jan. 17 to file another status report. The parties instead filed their motion seeking the case’s dismissal.

“The lawsuit was no longer necessary because HHS did what we demanded in the lawsuit—issue an ADR rule and take enforcement action against manufacturers,” said Barbara Straub Williams, a lawyer who represents RWC-340B.

RWC-340B filed a 340B ADR petition against AstraZeneca in January 2021 over the company’s policy of recognizing just one contract pharmacy per covered entity and only for those without an in-house pharmacy. Its lawsuit against HHS and HRSA was stayed while it pursued its claims in the ADR process. RWC-340B’s ADR proceedings against AstraZeneca are still active, Williams said.

The National Association of Community Health Centers filed the companion lawsuit to RWC-340B’s that prompted HRSA to issue the ADR final rule. NACHC dismissed its case in late November on the day that HRSA released its proposed replacement for its ADR process.

NACHC filed an ADR petition against AstraZeneca and Sanofi in January 2021. The panel reviewing it dismissed the petition in August on the grounds that it raises the same issues as those now before a federal appeals court. The U.S. Third Circuit Court of Appeals is expected to rule soon in AstraZeneca and Sanofi’s lawsuits over HRSA’s determinations that the companies’ 340B contract pharmacy policies violate federal law.

NACHC says the ADR panel’s dismissal of its claim leaves it with little choice but to seek legislation addressing drug companies’ 340B contract pharmacy restrictions.

Pharmaceutical Research and Manufacturers of America sued in federal district court in January 2021 to strike down both the 340B ADR rule that HRSA now is on track to replace and HRSA guidelines governing drug manufacturer audits of 340B covered entities. That case is ongoing.

Comments on HRSA’s proposed restructuring of the ADR process are due Jan. 30.

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