HHS Pulls Policy on Drug Discounts for Contract Pharmacies


June 21, 2021 10:06 am

The Health and Human Services Department is withdrawing a proclamation broadly calling on drugmakers to offer hotly contested price discounts for low-income health-care providers in an attempt to fend off litigation, but the agency won’t back down from fighting individual companies.

The HHS’ 2020 advisory opinion calling on pharmaceutical companies participating in the government’s 340B program to deliver drugs purchased by health centers to their contract pharmacies has been withdrawn in the “interest of avoiding confusion and unnecessary litigation,” the agency said in a June 18 court filing.

The withdrawal, however, “does not impact the ongoing efforts” to hold individual drugmakers accountable for limiting discounts, the HHS said in the filing.

The department’s rescinding of the advisory opinion follows lawsuits from drugmakers like AstraZeneca Pharma LP, Eli Lilly and Co., and Sanofi Aventis U.S. LLC that challenged the opinion, and it marks a blow to low-income health providers who allege they’re being cut off from discounts.

The HHS in Mary determined those drugmakers and others violated federal law by restricting discounts to covered entities via arrangements with contract pharmacies, and that they must immediately offer price cuts.

The HHS in Friday’s filing said this “enforcement process” functions “independently from the Opinion’s withdrawal.”

The advisory opinion on June 16 suffered another setback in AstraZeneca’s lawsuit. The U.S. District Court for the District of Delaware ruled that the HHS opinion was flawed and not the only way to view the law governing the 340B program.

However, the court declined to cut the advisory opinion down outright, allowing the HHS and the drugmaker to weigh in before the next move.

The HHS said it disagrees with the decision in the AstraZeneca case but is nevertheless withdrawing the opinion.

The case is Sanofi-Aventis U.S., LLC v. United States Dep’t of Health & Human Servs., D.N.J., No. 21-cv-00634, Notice 6/18/21.

To contact the reporter on this story: Ian Lopez in Washington at ilopez@bloomberglaw.com