Interior of Third Circuit Court courtroom
A federal appeals court ruled today that the 340B statute does not compel drug manufacturers to deliver 340B-purchased drugs "wherever and to whomever a buyer demands."

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Third Circuit Court Rules for Drugmakers in 340B Contract Pharmacy Cases

A federal appeals court in Philadelphia ruled 3-0 this morning that “Congress never said that drug makers must deliver discounted Section 340B drugs to an unlimited number of contract pharmacies.”

“By trying to enforce that supposed requirement, the government overstepped the statute’s bounds,” a three-judge panel of the U.S. Third Circuit Court of Appeals held Jan. 30 in drug manufacturers’ AstraZeneca, Sanofi, and Novo Nordisk’s lawsuits challenging the legality of federal 340B program violation determinations against them.

A federal appeals court in Washington, D.C., is expected to rule soon in similar cases against the government brought by Novartis and United Therapeutics. An appeals court in Chicago likewise is expected to rule soon in a case filed by Lilly.

The Third Circuit’s decision today in the AstraZeneca, Sanofi, and Novo Nordisk cases is a major victory for the pharmaceutical industry and a significant blow for the government and 340B health care providers. While the decision applies only to the three companies, it likely means there will be no enforcement action against any other drug companies with similar policies. As 340B Report reported in an exclusive in September 2022, the government had paused enforcement activity pending decisions from the appeals courts. The Third Circuit Court’s decision also could quicken hearings and votes and 340B in Congress.

“Statutory silences, like awkward silences, tempt speech. But courts must resist the urge to fill in words that Congress left out,” Judge Stephanos Bibas wrote for the court. “The Department of Health and Human Services claims that drug makers must deliver certain discounted drugs wherever and to whomever a buyer demands. But the relevant law says nothing about such duties. So HHS’s efforts to enforce its interpretation against the drug makers here are unlawful.”

This is a breaking news story. We will report in greater depth about the decision tomorrow.

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