STATEMENT ON COURT DISMISSAL OF 340B COMMUNITY PHARMACY LAWSUIT
WASHINGTON, D.C., FEB. 18, 2021— A federal judge in California has granted the government’s motion to dismiss a joint lawsuit that 340B Health and other plaintiffs had filed over drug company failures to offer mandated discounts through the 340B drug pricing program. In granting the motion, the court said the Department of Health and Human Services (HHS) had not yet issued a “final agency action” that can be challenged in court regarding manufacturer refusals to offer 340B discounts to covered entities on eligible drugs dispensed at community-based pharmacies. But the court left the door open for the plaintiffs to bring an action “seeking general enforcement of the statute in the future.”
HHS in a separate federal lawsuit also issued its strongest condemnation to date of the drug company behavior at the center of the dismissed case. Eli Lilly is asking a court in Indiana to issue an injunction against the 340B administrative dispute resolution (ADR) process that HHS says is the way to adjudicate the community pharmacy fight. In a strongly worded response opposing that request for an injunction, HHS says that Lilly and other drug companies refusing 340B pricing through community pharmacy arrangements “are engaged in a brazen attempt to effect a unilateral sea change in the settled operation of the 340B Program” and are seeking “to litigate out of the obligation” they have to safety-net providers and their patients.
The following is attributed to 340B Health President and CEO Maureen Testoni:
“We are disappointed by the court’s decision in our lawsuit and are reviewing next steps with our fellow plaintiffs and the attorneys representing us. We are pleased that HHS now is fully aligned with our position that drug company refusals to offer 340B pricing through community pharmacy arrangements are unconscionable actions that have no basis in the 340B statute. However, we continue to assert that HHS should take immediate enforcement actions rather than relying on an administrative dispute resolution process. The ADR process, which will be of unknown duration, is not the appropriate way to address behavior that HHS’s own chief counsel already has stated is plainly illegal. In addition, the ADR process is not yet operating, requiring hospitals to waste time and resources if they attempt to use this avenue to stop the drug companies’ illegal behavior. In the meantime, safety-net providers and the patients they serve will continue to suffer.”
“Make no mistake: This fight is far from over. Today’s decision in our lawsuit merely relates to procedural matters and not the merits of the legal arguments in this case. There is nothing stopping HHS or its next secretary from acting immediately to initiate enforcement proceedings against drug companies that are violating federal law. We will continue to work toward this solution to stop drug company attacks on 340B and the safety-net hospitals and patients who rely on it.”
Contact: Richard Sorian at richard.sorian@340bhealth.org or 202-536-2285.