Pharmaceutical manufacturer Boehringer Ingelheim Pharmaceuticals Inc. (BI) filed suit against the Department of Health and Human Services (HHS), the Health Resources and Services Administration (HRSA), and their leaders on Monday over the 340B drug pricing program. The program is a provision of federal health care law requiring drug makers to provide certain drug dispensing entities with discounts. The District of Columbia lawsuit seeks a binding declaration that the 340B statute does not require the company to provide discounted drugs to contract pharmacies.
The lawsuit follows countless others brought by pharmaceutical manufacturers like AstraZeneca, Eli Lilly, and Novo Nordisk over a December 2020 change in the 340B law that BI claims “dramatically expand[s] a federal program in a manner that is divorced from the statutory text.” In particular, the companies contest the advisory opinion decree that they must provide discounts to all contract pharmacies where an agency relationship exists between the pharmacy and the covered entity.
BI explains that under the rule change and in order to ensure that 340B discounts actually benefit covered entities or their underserved patients, the provision prevents covered entities from reselling or otherwise diverting a 340B discounted drug to an individual or entity who is not covered. According to the complaint, “[m]ultiple government reports have identified the high risk of diversion under the 340B program associated with the use of contract pharmacies.” To date, the plaintiff asserts, the HRSA has taken no real action to remedy this problem, which BI asserts only continues to grow.
The lawsuit then recounts developments in AstraZeneca’s case, wherein a federal court entered an order in June declaring the HHS’ advisory opinion unlawful and noting that “the 340B statute does not unambiguously obligate drug manufacturers to provide 340B discounted drugs to contract pharmacies.”
Shortly afterwards, BI announced that it would “provide drugs at the 340B discounted price to up to one commercial contract pharmacy for certain covered entities—namely those that do not have an in-house pharmacy.” HRSA reportedly took issue with this, contending that BI must provide discount drugs to all contract pharmacies and made reference to potential civil monetary penalties.
Despite correspondence from BI attempting to reason with HRSA, the agency’s view has remained unchanged. Accordingly, BI claims that it had no choice but to file suit. The complaint states three counts for relief under the Administrative Procedure Act targeting the agencies’ purportedly flawed administrative process, and a constitutional claim for the unauthorized taking of private property.
BI is represented by Covington & Burling LLP.
