Sanofi yesterday sent HRSA a long letter defending its limits on 340B contract pharmacy. | Shutterstock

Sanofi and Novartis Fight HRSA’s 340B Contract Pharmacy Demand Letters

Drug manufacturer Sanofi yesterday sent the U.S. Health Resources and Services Administration (HRSA) a 30-page defense of its requirement that 340B covered entities must submit their contract pharmacy claims data to a vendor to continue to be able to access 340B pricing on Sanofi products.

Sanofi was responding to HRSA’s May 17 letter informing the company that its policy violated the 340B statute and had to be revoked immediately. HRSA sent five other manufacturers that have stopped or restricted 340B contract pharmacy usage similar demand letters. It asked the companies to describe by June 1 how they plan to resume selling their products without restriction to covered entities that use contract pharmacies. HRSA said non-compliance could be punishable with civil monetary penalties of up to $5,883.00 for each instance of overcharging.

A federal district judge last week gave manufacturer Eli Lilly until June 10 to reply to HRSA’s request for its plan. AstraZeneca said yesterday that HRSA granted it an extension to, also to June 10. In response to the May 17 letter, Novartis yesterday sued HRSA and the U.S. Health and Human Services Department (HHS) to stop it from enforcing its interpretation of the 340B statute against Novartis and imposing CMPs against the company. Manufacturers Novo Nordisk and United Therapeutics have not responded to requests for information about whether or how they responded to HRSA’s demands.

Sanofi’s 340B contract pharmacy claims-data upload requirement applies only to community health centers, critical access hospitals, disproportionate share hospitals, rural referral centers, and sole community hospitals, the company says. It says these types of entities account for most contract pharmacy dispensing.

Sanofi, Lilly, AstraZeneca, Novo Nordisk, and Novartis are suing HRSA and HHS over their conclusion that the 340B statute requires drugmakers to offer 340B pricing when entities use contract pharmacies. Sanofi and Lilly also are challenging HRSA’s 340B administrative dispute resolution (ADR) regulations. (In an article yesterday, we incorrectly said AstraZeneca was challenging the ADR rules.)

Sanofi’s letter

In its letter to HRSA yesterday, Sanofi said HRSA should take no further action against it, including imposition of civil monetary penalties, “out of respect for the judicial process.”

“It should thus come as no surprise that Sanofi objects in the strongest possible terms to HRSA’s interference with that lawsuit,” the company said.

“If there is a final judgment in the pending litigation holding that Sanofi’s integrity initiative is impermissible under Section 340B, Sanofi will of course abide by that decision,” the company said. “But unless and until that occurs, Sanofi intends to continue operating its integrity initiative, which fully complies with Section 340B and can play a critical role in preventing waste and abuse in the 340B Program. Sanofi expressly reserves all of its rights, including the right to seek further relief in court and to present its objections to civil monetary penalties through administrative review.”

Novartis’ lawsuit

The lawsuit Novartis filed against HRSA and HHS yesterday seeks “temporary, preliminary, and permanent injunctive relief barring HRSA and HHS “and any entities acting in concert with them from initiating and/or pursuing any enforcement actions against Novartis in connection with its 340B contract pharmacy policy.”

“Nothing in the [340B] statute contemplates—let alone requires—that manufacturers agree to ship drugs nominally purchased by covered entities directly to ‘contract pharmacies’ for dispensing to both patients and non-patients of the covered entity alike,” Novartis argued. “And yet that is precisely what HRSA has purported to mandate here.”

Novartis said HRSA’s May 17 demand letter is unlawful and also is arbitrary, capricious, and an abuse of discretion.

“HRSA’s Decision Letter should be vacated and declared unlawful, and HHS should be enjoined from proceeding with its threatened actions,” it said.

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