On January 31st, 2023, the U.S. Court of Appeals for the Third Circuit found in favor of three drug companies, striking down actions that HHS has taken against the restrictions that AstraZeneca, Novo Nordisk, and Sanofi have imposed to limit access to 340B drug pricing. The three-judge panel in Philadelphia was unanimous in its decision that the three companies’ restrictions did not violate federal law and that HHS could not require the companies to restore 340B discounts to eligible hospitals. The judges found that Congress never explicitly stated that drug companies must deliver discounted Section 340B drugs to an unlimited number of contract pharmacies, there is no specific prohibition regarding the manufacturers current policies and that the government has overstepped its bounds by seeking to enforce the discounts. However, the judges in their decision did suggest that drug companies barring the use of contract pharmacies to a covered entity without an in-house pharmacy may be in violation of federal law, nothing the importance of access to these drugs. The judges did not elaborate further though as all three manufacturers currently allow for a single contract pharmacy exception, at least offering 340B drugs.
Currently, it is unknown whether the HHS will appeal the decision, as we are still awaiting a similar decision from two other appellate courts in the District of Columbia and the Seventh Circuit. If HHS were to appeal, the case would need to be accepted for review by the Supreme Court.
If you have any questions on these cases and how these impact your covered entity, please reach out to the Advis team regarding any 340B concerns, particularly regarding drug access and opportunities to mitigate the impact on the program.
Contact Advis at (708) 478-7030.
Published: February 3, 2023