Mixed court decisions for Novartis in DC and Sanofi, Novo Nordisk in NJ further complicate whose interpretation of 340B is correct

08 Nov 2021
endpts.com
Washington DC’s district court handed Novartis a clear win late Friday, arguing that the Big Pharma can place conditions on the sales of drugs discounted by a federal program to contract pharmacies. But this interpretation was contradicted by another decision handed down Friday in a New Jersey district court, in which Novo Nordisk and Sanofi were told that they cannot unilaterally impose restrictions on the 340B program and that their new policies “must cease.” The conflicting opinions are just the latest in a legal battle sweeping the country between the Biden administration’s HRSA, creating a piecemeal of interpretations of the program and how to enforce it. HRSA has struggled to regulate the drug discount program for the neediest Americans, both in terms of dealing with the pharma companies, who are challenging what they see as a ballooning program (to almost 10% of the entire US pharma market), and the proliferation of contract pharmacies receiving these steep discounts. DC Judge Dabney Friedrich made clear in her opinion that drugmakers are right to challenge recently levied fines from HRSA due to the companies’ newly enacted restrictions around these contract pharmacies, writing, “The statute’s plain language, purpose, and structure do not prohibit drug manufacturers from attaching any conditions to the sales of covered drugs through contract pharmacies.” A Novartis spokesperson told Endpoints News via email, “We believe the ruling validates our view of the 340B statute and that our contract pharmacy policy is fully consistent with the statutory requirements governing the program. The ruling is a win for the original intent of the 340B program to support vulnerable patients. The overwhelming majority of 340B discounts from medicines dispensed at contract pharmacies are not shared with patients; instead, a substantial portion benefits publicly traded, for-profit chain pharmacies (often integrated with large pharmacy benefit managers).” Novartis’ win also follows a recent win for Eli Lilly in Indiana district court regarding its interpretation of the 340B program, in which the judge took issue with the way HRSA has sought to regulate this space, writing that HRSA “fails to acknowledge or explain the agency’s changed position(s) with regard to its authority to enforce statutory compliance when the alleged violation is entangled with a regulated entity’s failure to comply with the agency’s nonbinding contract pharmacy guidance.” But that opinion also said Lilly is not permitted to make “unilateral extra statutory restrictions on its offer to sell 340B drugs,” while noting examples of some 340B-covered entities that lost access to hundreds of thousands in discounts. New Jersey’s district court judge Freda Wolfson also noted examples of lost discounts in her opinion, explaining how Massachusetts-based Beverly Hospital says it lost more than $125,000 in 340B savings since Sanofi’s 340B changes took effect. Rochester, NY-based Strong Memorial Hospital also said that Novo Nordisk and other drugmakers “refused to offer drugs at the 340B ceiling price, resulting in overcharges of more than $2 million. The hospital documented specific transactions in which Novo issued a denial, instead charging prices up to $1,291 per unit, which total several hundred thousand dollars in lost 340B savings.” The opinion also noted that a health care provider “in a high-poverty area says that it expects to lose $6 million of its $8 million budget to 340B restrictions and may lay off 35 staff.” Overall, the opinion points to records compiled by HHS showing the extent to which Novo and Sanofi’s changes to their respective 340B programs rapidly drove down savings: Wolfson further attacked the Lilly win in Indiana court, saying she’s “unpersuaded by the court’s characterization of HHS’ actions. The court calls HHS ‘duplicitous and misleading,’ whereas in my view, the agency may have been caught between transitioning administrations with dissimilar priorities.” How the pharma companies and HRSA interpret these conflicting court opinions and move forward with the 340B program remains unknown.
Organizations
Indications
-
Targets
-
Drugs
-
Get started for free today!
Accelerate Strategic R&D decision making with Synapse, PatSnap’s AI-powered Connected Innovation Intelligence Platform Built for Life Sciences Professionals.
Start your data trial now!
Synapse data is also accessible to external entities via APIs or data packages. Leverages most recent intelligence information, enabling fullest potential.