Eli Lilly Moves for Summary Judgment, Opposes HHS Motion to Dismiss 340B Drug Pricing Dispute

Eli Lilly’s fight is continuing against the Department of Health and Human Services (HHS)’s rule governing a discount drug pricing program, per a combined Monday Southern District of Indiana filing in support of its own motion for summary judgment and in opposition to the defendants’ motion to dismiss the case.

Eli Lilly and Co. and its subsidiary originally filed suit Jan. 12 against HHS, then-Secretary Alex Azar, and a handful of other government officials to challenge a Dec. 30, 2020, advisory opinion concerning the 340B program, which requires drug companies to provide discounts on their products to “covered entities,” including hospitals and health care providers serving low-income and vulnerable individuals. The program derives its name from Section 340B of the Public Health Service Act.

The advisory opinion purportedly required that the pharmaceutical manufacturers extend the discounts to “contract pharmacies,” which are not technically covered entities, although HHS claimed its opinion was not binding and was only clarifying the original meaning of the 340B rule.

Other drug companies, such as AstraZeneca and Novo Nordisk, joined the dispute in separate lawsuits — and the manufacturers’ defiance even surpassed litigation in their decisions to cease offering the drug discounts when contract pharmacies are involved in the distribution chain.

HHS fired back at Eli Lilly’s claims and the broader allegations by the pharmaceutical giants, as well as the companies’ decisions to stop providing the discounts to contract pharmacies, arguing that their claims seek to “upend the decades-old, settled operation of a statutory program,” and their actions prevent vulnerable communities from receiving affordable prescriptions.

Back-and-forth procedural moves have landed at both parties seeking a closure of the case, via summary judgment for either party or effective dismissal for the defendants.

Eli Lilly’s 74-page opposition largely reiterated its stance on HHS’s advisory opinion — that it is a veiled attempt at creating binding legislation, which purportedly exceeds the scope of HHS’s statutory authority — and its stance on contract pharmacies — that they’re not covered entities under 340B.

“This Court should review and invalidate that rule as contrary to law,” the drug company contended. “At the heart of virtually every issue in this case, both procedural and substantive, lies the same question: Does the 340B statute require manufacturers to deliver discounted drugs to contract pharmacies? The answer is that it does not.”

Eli Lilly is represented by Faegre Drinker Biddle & Reath LLP and Kirkland & Ellis LLP.