340B HEALTH SUBMITS MOTIONS TO INTERVENE IN ALL DRUGMAKER REBATE LAWSUITS
WASHINGTON, D.C.— Yesterday, 340B Health and two of our member hospitals submitted additional motions in federal court seeking to intervene as defendants in all pending drugmaker lawsuits against the government over the companies’ 340B rebate plans. These interventions would allow us to present the legal argument that these proposed rebate models are illegal under the 340B statute as well as provide the court with additional data and information on how replacing the upfront 340B discount model with a backend rebate scheme would place significant financial strain on 340B hospitals.
Last week, we filed a motion to intervene in the lawsuit by Johnson & Johnson (J&J), the first drug company in recent months to propose implementing rebates on some of its 340B drugs. The new motions are for similar lawsuits by Bristol Myers Squibb (BMS), Eli Lilly, Novartis, and Sanofi. The Health Resources & Services Administration (HRSA) indicated to the drugmakers that they had not received federal approval for the rebates, and the agency said companies would be subject to steep fines and the loss of all Medicaid and Medicare Part B coverage of their drugs if they proceeded.
“We filed today’s motion as part of our comprehensive legal and advocacy campaign against harmful drug company plans to force their 340B rebate schemes on hospitals,” 340B Health President and CEO Maureen Testoni said. “If the court permits J&J and other drug companies to replace upfront 340B discounts with backend rebates, it would cause crippling damage to safety-net hospitals throughout the nation. It would force hospitals to divert scarce resources to comply with rebate requirements, pay tens of millions of dollars in additional drug purchase costs, and assume the enormous financial risk of drugmakers rejecting legitimate rebate claims based on their own interpretations of 340B rules. The 340B Statute does not permit these rebate models, and the federal government was correct to block them and protect hospitals.”
340B Health filed our motion to intervene with UMass Memorial Medical Center (UMMC), based in Worcester, Mass., and Genesis HealthCare System, based in Zanesville, Ohio. Both are disproportionate share (DSH) hospitals representing the thousands of 340B hospitals of all types that would face harm from rebate schemes if the court allows them to take effect. Memos to the court supporting our motions in the J&J, BMS, Lilly, Novartis, and Sanofi lawsuits details the damage this would cause just for these two hospitals.
Contact: Jon Tilton at jon.tilton@340bhealth.org or 202-536-2285