On October 9, Powers filed a federal lawsuit against the U.S. Department of Health and Human Services (HHS) and HHS Secretary Alex Azar on behalf of the firm’s client Ryan White Clinics for 340B (RWC-340B) and two 340B grantee clinics.

The complaint was filed in response to recent actions by drug manufacturers that restrict distribution of 340B drugs. The 340B program requires manufacturers to sell discounted drugs to covered entities in order to participate in the Medicaid and Medicare Part B insurance programs. Recently, however, four pharmaceutical manufacturers have flouted the 340B statute and regulation by refusing to sell 340B discounted drugs to covered entities when ordered via contract pharmacy arrangements.

The complaint calls on HHS and the Health Resources and Services Administration (HRSA) to take action against those four drug manufacturers (Eli Lilly and Co., Sanofi-Aventis US LLC, AstraZeneca PLC, and Novartis Pharmaceuticals) and protect 340B entities’ right to dispense drugs through contract pharmacies.  It also asks the U.S. District Court to order Secretary Azar to:

  • promulgate dispute resolution regulations within 60 days of the Court’s order;
  • enforce the covered entities’ rights to purchase covered outpatient drugs via contract pharmacies at 340B discounts by ordering them to refund overpayments owed to the covered entities;
  • use his authority to impose civil monetary penalties upon the named drug manufacturers;
  • revoke the pharmaceutical pricing agreement (PPA) of any pharmaceutical manufacturer that does not offer drugs at 340B discounts when ordered via contract pharmacy arrangements; and
  • exclude such manufacturer from the Medicaid and Medicare Part B programs.

To read RWC-340B’s press release about the lawsuit, click here, and to read the full complaint, click here.

To learn more, contact Powers Attorneys Ron Connelly at Ron.Connelly@PowersLaw.com, Peggy Tighe at Peggy.Tighe@PowersLaw.com, Bill von Oehsen at Bill.vonOehsen@PowersLaw.com, or Barbara Williams at Barbara.Williams@PowersLaw.com.

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