United Therapeutics told a judge on Friday that the government’s position that the company's 340B contract pharmacies are illegal “contravenes the plain text” of the 340B statute.

United Therapeutics Fleshes Out its 340B Contract Pharmacy Legal Arguments

The government’s position that United Therapeutics’ (UT) restrictions on 340B contract pharmacies are illegal “contravenes the plain text” of the 340B statute, the drug company told a federal district judge on Friday.

The U.S. Health Resources and Services Administration’s (HRSA) conclusion “is also invalid because it rests on no valid legal or factual foundation,” and is arbitrary and capricious on multiple grounds, UT said in a July 17 motion for summary judgement. The government’s response is due by Aug. 10.

UT sued HRSA on June 23. Five other manufacturers that also are denying 340B pricing on drugs shipped to contract pharmacies—AstraZeneca, Eli Lilly, Novartis, Novo Nordisk, and Sanofi—previously filed similar lawsuits. A seventh drug maker, Boehringer Ingelheim, is scheduled to stop shipping 340B-purchased drugs to hospitals’ contract pharmacies on Aug. 1, which likely would give rise to a seventh lawsuit.

U.S. District Judge Dabney Friedrich announced last week that she will hold a joint hearing in October on the merits of UT and Novartis’ arguments, and the government’s counter-arguments.

Last Nov. 18, UT told covered entities that, starting Nov. 20, 2020, it would accept 340B contract pharmacy orders only if the entity used the pharmacy “for a valid 340B purchase” of a UT covered outpatient drug during the first three full quarters of 2020. Entities buying UT products for the first time, and that lacked an in-house pharmacy, could designate a single contract pharmacy, UT said.

UT initially said that, starting May 13, 2021, it would accept 340B contract pharmacy orders from entities only if the entity provided, on an ongoing basis, contract pharmacy claims data for the company’s products. On May 11, 2021 UT pushed back its claims data requirement’s start date to Sept. 1.

On May 17, HRSA sent UT and the five other manufacturers denying 340B discounts letters informing them that their policies are in direct violation of the 340B statute. UT asked for and got a second letter from HRSA on May 28 clarifying its findings.

UT is challenging the legality of HRSA’s findings in those letters. “The court should set aside the violation determination, declare that UT’s policies do not violate Section 340B, and grant any other relief as appropriate,” the company told the judge.

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