Eli Lilly and US HHS at Odds Over 340B Program in Federal Court

The US Department of Health and Human Services (HHS) and Eli Lilly butted heads in a recent federal appeals court hearing over the agency’s 340B drug discount program, which requires that drugmakers give discounts on certain drugs to pharmacies that serve underprivileged communities. Lilly has refused to sell discounted drugs to several pharmacies that have contracts with the 340B program. The pharma giant, which has reported record profits in recent years, says that the law doesn’t require them to serve all such pharmacies.

According to Ian Lopez, “Congress didn’t give the HHS the authority to make up new rules when erecting the legal framework around the drug discount program, John O’Quinn, a Kirkland & Ellis partner representing Lilly, argued in the hearing. But the agency’s attempts to force Lilly to ship certain discounted products suggest the agency “could change the situation on the ground,” O’Quinn said. In representing the HHS, Department of Justice attorney Alisa Klein contended that “the point” of the 340B program is to help providers get drugs to people in underserved communties. That renders Lilly’s position that it won’t ship discounted products to contract pharmacies untenable, she said.”

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(Source: Bloomberg Law, October 31^st, 2022)