FIVE HOSPITAL ASSOCIATIONS URGE APPEALS COURTS TO BACK 340B ENFORCEMENT
WASHINGTON, D.C.— 340B Health joined with four other national hospital associations to file “friend of the court” briefs with two federal appeals courts urging them to support the federal government’s ability to enforce the 340B drug pricing program statute and require drug companies to provide discounts for drugs purchased by safety-net hospitals and dispensed by community pharmacies. The organizations filed the amicus briefs on May 16 with the U.S. Court of Appeals for the Third Circuit in cases involving drug giants Sanofi and Novo Nordisk and with the U.S. Court of Appeals for the D.C. Circuit in cases involving Novartis and United Therapeutics. The four companies are among the 16 drugmakers restricting 340B pricing.
340B Health, the American Hospital Association (AHA), America’s Essential Hospitals (AEH), the Association of American Medical Colleges (AAMC), and the Children’s Hospital Association (CHA) are urging the courts to hold that “drug companies must go back to providing 340B discounted drugs to [340B covered entities], regardless of whether these vital medicines are being dispensed in-house or through outside pharmacies.”
The case involves restrictions the four companies imposed in 2020 on 340B pricing for drugs dispensed by community and specialty pharmacies. The Health Resources & Services Administration (HRSA) sent the companies enforcement letters stating that their policies violated the 340B statute and ordering them to restore the discounts, but the drugmakers went to court to challenge those letters. Since that time, the number of drug companies restricting 340B pricing has continued to grow. A recent report by 340B Health demonstrated that the worsening financial impact of those restrictions on hospitals is harming care for patients with low incomes and those in rural communities.
The briefs note that the 16 drug companies are using their restrictions to “avoid having to pay congressionally imposed penalties they otherwise would face.” 340B penalizes companies that raise their drug prices faster than the inflation rate. Repeated price hikes on a company’s drugs can require the company to sell those drugs to eligible hospitals at substantially greater discounts and can lower the 340B prices of certain drugs to as little as a penny a dose. Independent research has demonstrated that this penalty restrains price increases for drugs sold to all purchasers, not just 340B providers. By denying 340B pricing for drugs dispensed by community and specialty pharmacies, companies are avoiding these penalties and also avoiding discounts on costly specialty drugs.
The five organizations urged the appeals courts to uphold the government’s enforcement authority on manufacturers’ obligations to provide 340B discounts, warning that “the continued viability of the 340B drug discount program is at stake.”
Contact: Richard Sorian at richard.sorian@340bhealth.org or 202-536-2285.