Drug companies AstraZeneca, Eli Lilly and Sanofi filed separate lawsuits seeking to preserve their ability to restrict offering 340B-discounted drugs to contract pharmacies.
The lawsuits, filed Tuesday in different federal courts, seek to get rid of an advisory opinion filed by the Department of Health and Human Services’ (HHS') general counsel that says drug companies must offer 340B drugs to contract pharmacies, which are third-party entities that dispense drugs on behalf of hospitals participating in the program.
The drug companies argue that the advisory opinion contracts the statute for the 340B program, which requires manufacturers to offer discounted products to safety net hospitals and other providers in exchange for participation in Medicare and Medicaid.
“The statute, on its face, does not require manufacturers to recognize any contract pharmacies, much less unlimited contract pharmacies,” the legal filing from AstraZeneca said.
AstraZeneca wants a federal court to declare the advisory opinion didn’t follow proper procedure and exceeded HHS’ statutory authority. The manufacturer also wants a court to declare that companies are not required to offer 340B discounts to contract pharmacies.
The lawsuits come less than a week after the American Hospital Association (AHA) and five other groups and three individual systems sent letters to the drug companies that have halted or restricted sales to contract pharmacies. They wanted the drugmakers to reinstate sending the discounted products to their pharmacies and reimburse facilities for any damages.
AHA and several groups sued HHS to get the agency to clamp down on the drug manufacturers' moves.
AstraZeneca, Eli Lilly, Novartis, Novo Nordisk, Sanofi and United Therapeutics have taken a range of actions to clamp down on sales to contract pharmacies, which a majority of 340B-covered entities use.
The companies have argued that the discounts do not filter down to patients, but hospital and advocacy groups charge that the discounts are vital, especially as safety net providers operate on thin margins.
“Make no mistake: the boom in contract pharmacies has been fueled by the prospect of outsized profit margins on 340B discounted drugs,” AstraZeneca argued in its court filing.