- Another decision was handed down Wednesday in the ongoing battle with hospitals over the 340B prescription drug program as a federal court decided in favor of AstraZeneca over HHS.
- The decision vacates a violation letter from May the agency sent to AstraZeneca, which argued the company was violating the 340B statue because of its restrictions on discounted prices of outpatient drugs that providers delivered through contract pharmacies. Five other drugmakers received similar letters.
- The court ruled that the violation letter didn't make a different argument than an opinion letter that had already been vacated by the courts, and that the violation letter falsely stated that HHS has maintained a consistent stance on use of contract pharmacies in 340B.
This is the fourth federal opinion issued in the continuing legal battle between major drug companies and the Health Resources & Services Administration that runs the program, meant to give community hospitals a break on drug prices as they stretch their resources.
Two have gone in HRSA's favor and the other two went to the drugmakers. The three previously decided now are before federal appeals courts. HHS didn't immediately reply to an inquiry on whether it plans to appeal Wednesday's decision.
340B Health CEO Maureen Testoni in a statement urged the agency to do so.
"More than 700 companies are abiding by those legal agreements, but a growing number of drugmakers — including some of the world's largest and most profitable — are now violating the law," she said.
340B Health said the drug program provides crucial resources that help hold up the healthcare safety net. The group's recent survey found that critical access hospitals reported losing nearly 40% of the savings they had been getting.
The court wasn't without sympathy for that position, saying in the Wednesday decision it wanted to emphasize "what it is not deciding" and said it "takes these concerns seriously and hopes that all patients of covered entities receive appropriate medical treatment."
The issue it was determining is whether HRSA complied with federal regulations when issuing the violation order, the decision states.
More drug companies are putting in place policies that don't always offer the ceiling price for providers who use contract pharmacies to dispense the medications. The government argues the statue is clear that such acts are violation of the law, but courts haven't always agreed.
The drug companies involved in the lawsuits argue that HHS Secretary Xavier Becerra is pursuing them under political pressure to combat rising drug prices. Lobby group PhRMA also has balked that the program doesn't require hospitals to account for their savings or a mechanism to ensure they go toward patient care, a complaint shared by some in Congress.
The PhRMA also has said research shows the program doesn't save patients money in the long run and that 340B hospitals have higher drug spending than hospitals not in the program. However, a Medicare Payment Advisory Committee report concluded the program's effect on pricing was modest.
The lobby of research that backs one sector over another seems likely to continue. Just Wednesday, the Alliance for Integrity and Reform of 340B, which counts pharma companies among its members, issued a report stating 65% of 340B hospitals provide charity care below the national average.