3rd Circuit Court sides with 340B drugmakers in contract pharmacy case; Court states drugmakers that participate in 340B drug pricing program do not have to provide discounted 340B drugs to unlimited number of contract pharmacies

Drugmakers that participate in the 340B drug pricing program do not have to provide discounted 340B drugs to an unlimited number of contract pharmacies, the U.S. Court of Appeals for the 3rd Circuit ruled today in Sanofi-Aventis U.S. v. HHS et al. Cases raising similar legal questions are pending in the District of Columbia and 7th Circuits.

After providing discounts through both in-house and contract pharmacies since the beginning of the 340B program, several major drug companies began to place limitations on hospitals’ use of contract pharmacies to distribute drugs eligible for 340B discounts unless those hospitals complied with certain conditions. These actions prompted the Department of Health and Human Services to issue cease-or-desist letters to the drug companies in which the department declared that Section 340B requires drugmakers to deliver 340B drugs to an unlimited number of contract pharmacies. In response, the drug companies filed several lawsuits challenging HHS’s interpretation of the 340B statute and its authority to require those companies to distribute 340B drugs without restrictions or conditions.

AHA Deputy General Counsel Chad Golder said AHA “disagrees with the Third Circuit’s decision. As we have explained in numerous amicus briefs, drug companies do not have the authority to place restrictions on how 340B hospitals ensure that their patients will get the drugs they need. We expect that the two other courts of appeals that are currently considering the issue will agree. The only result of this decision will be even greater profits for drug companies and reduced access to medicines for patients.”  

In amicus briefs filed last May, the AHA, 340B Health, America’s Essential Hospitals, Association of American Medical Colleges, and Children’s Hospital Association urged the courts to require drug companies to fulfill their legal obligations to provide 340B discounted drugs to eligible hospitals and health systems, regardless of whether the drugs are dispensed on site or through contract pharmacies.  

AHA Friday submitted comments on a November proposed rule that would revise a 2020 final rule that established a process for resolving administrative disputes in the 340B drug pricing program.