Let the Lawsuits Begin | 340B Matters
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08 Oct Let the Lawsuits Begin

By 340B Matters

The drug industry is spoiling for a legal fight over the 340B Drug Discount Program. Safety-net hospitals and clinics should give them one by suing over clear breaches of federal law.

By turns peremptory and obnoxious, Eli Lilly, AztraZeneca, Merck and Sanofi have unilaterally raised prices and threatened onerous reporting from safety-net healthcare providers. Specifically, Lilly and AstraZeneca have refused to provide discounted 340B pricing to facilities that ship them on to contracted pharmacies for sale. It’s feared that Merck and Sanofi will try to twist the program into a rebate system they control.

The moves are illegal.

After years of failed attempts to kill the program politically, the ever-profitable drug industry is now betting it can win in court. True, Big Pharma has an ocean of money to spend on lawyers. But 340B hospitals and clinics have the law on their side.

On October 9, Ryan White Clinics, Matthew 25 AIDs Services and CEMPA Community Care filed suit against Health and Human Services Secretary Alex Azar and Health Resources and Services Administration Administrator Thomas Engels. They are asking a federal judge to compel Azar and Engels to force drug companies to follow the 340B law.

“The Plaintiff Covered Entities are suffering immediate and irreparable harms from the Secretary’s failure to enforce the Plaintiff Covered Entities’ rights to purchase covered outpatient drugs at 340B discounts via contract pharmacy arrangements,” they wrote.

The National Association of Community Health Centers is also preparing to sue. “Let me be clear — Community Health Centers cannot and will not stand by while manufacturers and for-profit third parties line their own pockets at the expense of people affected by [the pandemic] and the providers who serve them on the frontlines,” said CEO Tom Van Coverden. “Countless lives are at stake.”

Connecticut Attorney General William Tong has also called on the drug companies to cease and desist. The state AG’s office has a history of suing pharmaceutical companies.

We applaud these announcements. And we call on all safety-net healthcare providers to join the effort. Now is not the time for temerity as hospitals and clinics face steep losses caring for those sickened during the current health crisis.

The only thing that will halt the drug industry’s attacks on 340B is a decisive legal loss.

Let’s get started.



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