Drug manufacturer UCB has sued in federal court to overturn federal health officials’ finding that the Belgian company’s restrictions on 340B pricing when covered entities use contract pharmacies are illegal and must stop or the company could face civil monetary penalties of up to $6,323.00 for each instance of overcharging.
UCB is the ninth drugmaker to sue the government after getting a letter from the U.S. Health Resources and Services Administration (HRSA) telling it its 340B contract pharmacy requirements are unlawful. UCB got its letter in June.
“Like the carbon copies that preceded it, the violation letter to UCB is agency action that is invalid multiple times over,” UCB said in its Sept. 23 complaint filed in federal district court in Washington, D.C. “It should be vacated, set aside, and declared unlawful.”
The case was assigned to Judge Dabney Friedrich, who also is handling five related lawsuits brought against the government by drugmakers Novartis, United Therapeutics, Boehringer Ingelheim, Merck, and drug company contractor Kalderos.
The U.S. Court of Appeals for the District of Columbia Circuit is reviewing Friedrich’s November 2021 ruling in Novartis and United Therapeutics’ consolidated cases. She set aside HRSA’s violation letters to the companies on the grounds that the 340B statute does not bar drugmakers from imposing any conditions on 340B pricing when covered entities use contract pharmacies. Friedrich however declined to declare Novartis and United Therapeutics’ policies legal.
“The statute’s plain language, purpose, and structure do not prohibit drug manufacturers from attaching any conditions to the sales of covered drugs through contract pharmacies,” Friedrich wrote. But, she continued, “Nor do they permit all conditions.”
Any future enforcement action against the companies “must rest 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,” she said.
Friedrich has stayed proceedings in Boehringer Ingelheim, Merck, and Kalderos’ lawsuits pending the appeals court’s ruling on her decision in Novartis and United Therapeutics’ cases. She probably will stay proceedings in UCB’s case too.
The D.C. Circuit Court is scheduled to hear arguments in Novartis and United Therapeutics’ cases on Oct. 24.