AstraZeneca Moves for Summary Judgment in HHS 340B Drug Pricing Program Suit

On Tuesday, AstraZeneca Pharmaceuticals LP asked the District of Delaware court presiding over a drug pricing dispute to grant summary judgment in its favor. The 27-page opening brief sets forth arguments echoed by other pharmaceutical companies like Eli Lilly and Novo Nordisk in their parallel suits filed against the U.S. Department of Health and Human Services (HHS), its leaders, and the Health Resources and Services Administration (HRSA).

The case centers on AstraZeneca’s Summer 2020 policy change deciding to offer 340B Drug Pricing Program discounts to only a single pharmacy for entities that do not maintain their own on-site dispensing pharmacy. In response to the plaintiff and other manufacturers’ similar decisions, the HHS issued an advisory opinion on Dec. 30, 2020 concluding that “manufacturers are ‘obligated’ to provide discounts for all contract pharmacy sales where an agency relationship exists between the pharmacy and the covered entity,” according to the brief.

The movant critiqued the HHS for its recent about-face, wherein the agency claimed that its view is compelled by the plain language of the relevant provisions within the Social Security Act. Instead, AstraZeneca claimed, its position is contrary to the approach it adopted until 2010, defies the law, and constitutes an arbitrary and capricious action.

The brief explained that the statute “does not require manufacturers to recognize any contract pharmacies, let alone unlimited contract pharmacies.” The company further argued that if Congress had intended 340B Program discounts to extend to contract pharmacy purchases, it would have said so explicitly, because elsewhere in the law, Congress makes such specifications.

For a multitude of reasons, the advisory opinion is also arbitrary and capricious in violation of the Administrative Procedure Act (APA), AstraZeneca contended. Allegedly, the agency failed to explain the reversal of its position, declined to consider pharmaceutical manufacturers’ view while taking into account those of other stakeholders, erroneously assumed that contract pharmacies are agents of covered entities, and ignored evidence that the newly espoused policy has led to “spikes in unlawful drug diversion and duplicate discounting.”

Finally, AstraZeneca pled for judicial intervention, citing the alleged fact that third parties have already begun to take action against it in reliance on the advisory opinion. The plaintiff claimed that it is left without an administrative avenue for contesting the HHS opinion affirmatively, and is otherwise forced to await an enforcement action, brought either by a covered entity or by the HRSA itself.

The defendants’ opposition is due Apr. 27.

AstraZeneca is represented by McCarter & English LLP and Arnold & Porter Kaye Scholer LLP. The defendants are represented by the U.S. Department of Justice.