Novartis is the second known drug manufacturer subpoenaed by the Vermont attorney general over manufacturer denials of or restrictions on 340B pricing for drugs shipped to contract pharmacies.

Vermont AG Issues Subpoena to Novartis for 340B Documents and Information

Vermont’s top law enforcement official has asked a second drug manufacturer—Novartis—for documents and information concerning the company’s participation in the 340B program in the state.

Tuesday in its interim financial report for the first quarter of 2021, the Swiss drugmaker said that in February it received a civil investigative subpoena from Vermont Attorney General T.J. Donovan (D) requesting documents and information about its participation in 340B in Vermont.

Novartis said it “is providing documents and information to the Office of the Attorney General.”

In early March, French drug manufacturer Sanofi said in its annual financial report for 2020 that Donovan’s office had issued a subpoena “seeking certain information about Sanofi’s 340B program participation.”

Novartis and Sanofi are among the six drug manufacturers that that either have stopped providing 340B discounts on drugs dispensed by contract pharmacies or conditioned discounts on covered entities’ provision of their 340B contract pharmacy claims data. The others are Eli Lilly, AstraZeneca, Novo Nordisk, and United Therapeutics.

The U.S. Health and Human Services Department (HHS) said in a legal advisory opinion in December that drug companies must offer drugs to covered entities at or below the 340B ceiling price without qualifications or restrictions on how the entity chooses to distribute the drugs. But it has done nothing so far to stop the six companies from denying 340B pricing on drugs dispensed by contract pharmacies.

Lilly, AstraZeneca, Sanofi, and Novo Nordisk are suing in federal courts to stop HHS from enforcing the 340B statute against them as spelled out in the advisory opinion. Lilly and Sanofi also contest the legality and constitutionality of HHS’s 340B administrative dispute resolution regulations. They expect that 340B ADR panels will apply the advisory opinion against them in any dispute resolution proceedings. 340B ADR petitions have been filed against Lilly, AstraZeneca, and Sanofi. Those proceedings have been stalled pending the appointment of ADR board members.

Six hospital groups have sought to intervene in the four lawsuits to support the advisory opinion. On Tuesday, a federal judge declined to let them intervene in AstraZeneca’s case but said he will let them file friend of the court briefs and participate in oral arguments.

Vermont attorney general Donovan was among the bipartisan group of 29 state attorneys general who in December asked then-U.S. Health and Human Services (HHS) Secretary Alex Azar “to address drug manufacturers’ unlawful refusal to provide critical drug discounts to covered entities.” HHS Secretary Xavier Becerra helped orchestrate the appeal to Azar in his former capacity as California attorney general.

It is not known whether Donovan also has subpoenaed Lilly, AstraZeneca, Novo Nordisk, and United Therapeutics for documents and information about their participation in 340B.

Donovan’s office and the four companies did not respond to requests for comment yesterday.

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