At least three drug companies have filed separate suits against the U.S. Department of Health and Human Services (HHS) over an advisory opinion the HHS Office of Inspector General (OIG) issued Dec. 30 stating that drug manufacturers are obligated to provide 340B pricing for outpatient drugs dispensed by contract pharmacies on behalf of hospitals and clinics that qualify for the discounts.
Indianapolis-based Eli Lilly and Co. filed a complaint for declaratory and injunctive relief in the U.S. District Court for the Southern District of Indiana. The complaint asks the court to declare that the OIG decision violates the Administrative Procedure Act because it was issued without following proper procedure and exceeds statutory authority, and that Lilly isn’t required to offer the 340B discounts to contract pharmacies. It also asks the court to enjoin enforcement of the OIG decision.
As the first company to curtail the discounts to contract pharmacies, Lilly explained its actions in the complaint, claiming that contract pharmacies have been “‘generat[ing] revenue’ to the tune of hundreds of millions of dollars per year by perverting the 340B Program simply by ‘purchas[ing] covered outpatient drugs at the 340B Program price for all eligible patients regardless of the patients’ income or insurance status’ and ‘receiving reimbursement from patients’ insurance that may exceed the 340B prices paid for the drugs.’”
Astrazeneca plc, of Cambridge, U.K., and Paris-based Sanofi SA filed similar suits in different U.S. courts.
The OIG opinion came on the heels of a lawsuit filed last month by the American Hospital Association and several other hospital and pharmacy groups seeking to force HHS to take action against the drug companies for refusing the discounts to the pharmacies.
HHS posts rule for agency enforcement action
HHS released a final rule that spells out the appropriate use of HHS agency guidance documents in connection with legal proceedings.
The rule prohibits the use of noncompliance with guidance documents as the sole source of allegations of violation of the law. To thwart “unfair surprise” in agency enforcement actions, the rule further disallows the use of any compliance standards that haven’t been publicly disclosed.
It also would require agencies to provide written notice and an opportunity to respond when they take civil enforcement action with the potential for legal consequences.
“A cornerstone of fair governance is transparency – regulated parties need to know in advance the standards by which the government will judge their conduct,” HHS Chief of Staff Brian Harrison said. “When HHS takes civil enforcement actions, we will only do so in a manner that promotes accountability and ensures fairness.”
Guidance to help with COVID-19 MAbs
The FDA issued new guidance to help sponsors develop monoclonal antibodies (MAbs) and other therapeutic proteins to treat COVID-19 and to facilitate more complete submissions.
The guidance describes how potency assay methods required for release and stability testing can be shown to assess comprehensively known or potential mechanisms of action. The testing methods should be sufficiently sensitive to demonstrate lot-to-lot consistency, according to the FDA. Additional methods demonstrating the biological function of a MAb may be needed for characterization and comparability studies.
This guidance applies only to MAbs and other therapeutic proteins designed to bind to viral receptors on host cells, inhibit viral entry or elicit Fc-mediated effector function.
Chinese pharma exec sentenced on U.S. drug charges
Hao Qin, who held high-level executive positions at pharmaceutical companies in China, was sentenced Jan. 13 in a U.S. district court to 28 months in prison for drug and money laundering offenses, including the importation of fentanyl analogues into New Jersey, according to the U.S. Drug Enforcement Administration (DEA).
Qin, of Shanghai, was responsible for importing more than 500 kilograms of controlled substance analogues into the U.S., the DEA said. In laundering the proceeds, he accepted wire payments designed to pay off a $500,000 drug debt incurred by one of his former clients in the U.S.