U.S. Department of Health appeals drug discount program ruling in federal court

We reported in November 2021 that the U.

The 340B Drug Discount Program requires drugmakers to provide discounts on all outpatient medications in hospitals and clinics serving low-income populations, typically estimated at 25% to 50%, but may be higher

In 2020, when a hospital or clinic buys a drug and then delivers it to contracted retail and specialty pharmacies for patient pickup or pharmacy delivery, rather than dispensing it through its own in-house pharmacy

But the drugmaker's move has drawn ire from lawmakers, state attorneys general and dozens of patient groups opposed to the businesses, who say they violate federal law and disadvantage low-income people, especially during a pandemic

Some drugmaker system hospitals and clinics provide data on patient claims beyond Medicaid recipients

The outburst of conflict reflects a years-long 340B battle between the pharmaceutical and hospital industries

In December 2020, HHS issued an advisory in response to drugmakers stating that businesses are obligated to offer discounts even when hospitals and clinics use contract pharmacies to deliver drugs

Some drugmakers have since sued, arguing that HRSA bypassed the usual procedural rules and should have provided notice before issuing an opinion

In May last year, the conflict continued to intensify

But then different federal courts began to weigh

In late October, another federal court ruled that HRSA does not have the power to compel drugmakers to offer discounts

The following month, another federal judge ruled that HHS crossed the line by threatening to punish Novartis and United Therapeutics for cutting discounts

HHS later issued a statement disagreeing with the view that the drugmaker did not violate federal law