United States: Pharmaceutical giant Eli Lilly (LLY.N) on Thursday asserted that HRSA had prevented the company from implementing the right one which involved altering ways of providing discounted prescription drugs to hospital.
Lawsuit Filed
The case is built around the federal 340B program, where drug manufacturers have to sell drugs at discounted rates to eligible related healthcare facilities that serve vulnerable communities. Companies have to join the program to get money from federal healthcare insurance programs, such as Medicare and Medicaid, as reported by Reuters.
According to Eli Lilly, its program is designed to directly transfer funds to the covered entity week by week and guarantee that they accept no more than a 340B ceiling price.
The company also pointed out that in letters sent to the company, the HRSA – a component of the US Health and Human Service Department – refused Lilly’s model, saying that it was noncompliant with the 340B law, according to Lilly in a legal filing to the Washington DC federal court.
The HRSA was not immediately available to provide its reaction to the news; they did not return a Reuters comment request.
Tension in the Pharmaceutical Sector
Lilly followed drugmaker Johnson&Johnson JNJ.N which sued the Health and Human Services Department on Tuesday, claiming the agency was preventing the company from selling psoriasis treatment Stelara and blood thinner Xarelto to some hospitals at full price before applying drug rebates.
It is worth stating that the 340B program is among the many health programs that have drawn legal attention in the past years, as reported by Reuters.
Legal Precedents and Ongoing Debate
A U.S. appeals court in the previous year ruled that legitimate producers of drugs can restrain health care entities from using third-party pharmacies that distribute drugs within the 340B program. The contract pharmacies interpreted the move as HHS ordering the drug makers to refrain from restricting sales to contract pharmacies.
