The Health Resources and Services Administration (HRSA) has called for drugmaker Boehringer Ingelheim to be fined for its move to restrict sales of 340B-discounted products to contract pharmacies.
The decision, outlined in a letter Tuesday to the drugmaker (PDF), comes as the administration is fighting with five pharmaceutical companies over similar restrictions. The drugmakers have argued in court, with mixed results, that HRSA does not have the authority to issues warnings or fines and didn’t give proper notice.
Boehringer announced back in July 2021 that it will cut off sales of 340B products to contract pharmacies with some limited exceptions. HRSA wrote to the drugmaker in October that the move violated the 340B federal statute, which requires manufacturers to honor purchases regardless of how they are dispensed.
However, the latest letter from the agency said that Boehringer failed to reverse the move since the October letter.
HRSA has referred the matter to the Department of Health and Human Services' Office of Inspector General (OIG) for the potential for any fines.
Boehringer told Fierce that the goal behind the policy was to ensure that patients benefit from the discounts and not "for-profit contract pharmacies."
The drugmaker cited prior legal rulings in favor of the pharmaceutical industry and said that its policy complies with the 340B statute.
HRSA’s decision to forward Boehringer for a fine comes as the agency’s efforts to fine other drug companies for similar restrictions remain mired in a sprawling legal feud.
The agency warned six drugmakers—AstraZeneca, Eli Lilly, Sanofi, United Therapeutics, Novo Nordisk and Novartis—to reverse their own restrictions. However, the drugmakers also refused, and HRSA forwarded a request for fines to OIG.
But five pharmaceutical companies sued the Biden administration over the warnings, claiming HRSA did not have the authority to issue them and that they were allowed under the 340B statute to restrict sales to the pharmacies.
So far, the rulings have been mixed, with some judges ruling in favor of the government and two in favor of the drugmakers.
Other pharmas have not been deterred by the prospect of fines, as major companies like Johnson & Johnson have instituted similar restrictions in recent months.
The feud centers on long-simmering complaints the pharmaceutical industry has had over the 340B program, which calls for drugmakers to give discounts to safety-net providers in exchange for participation in Medicare and Medicaid.
Pharmaceutical manufacturers have argued the program has ballooned and the benefits of the discounts are not reaching patients, while hospital groups and advocates charge the program is vital to help safety-net providers that operate on thin margins and face higher and higher drug prices.