Eli Lilly Fires Back at HHS as Briefing Concludes in Motion for Drug Pricing Rule Injunction

The pharmaceutical company litigating against the U.S. Department of Health and Human Services (HHS) and several of its individual administrators has filed its final brief in the Southern District of Indiana in support of its request for a preliminary injunction delaying the effective date of a rule expanding the federal 340B Drug Pricing Program. Tuesday’s reply takes aim at arguments the government leveled at Eli Lilly last week, including that the company was attempting to rewrite the law in order to boost its bottom line.

The reply recounts Eli Lilly’s version of events, that “[a]fter a decade of inaction, the government bowed to ‘public outcry’ [] and promulgated an ‘Advisory Opinion’ that both reversed a longstanding and recently reaffirmed agency policy and imposed extra-statutory burdens on politically unpopular drug manufacturers.” The brief then claims the HHS issued “a defective [alternative dispute resolution] regulation, based on a stale record, without accounting for intervening factual and legal developments.” It asserts that this adjudication scheme was unconstitutionally created by unaccountable and biased agency employees.

Eli Lilly then reasons that the government’s efforts to shield its rulemaking only weaken its defensibility. The reply brief explains that “[b]edrock principles of administrative law preclude the government from defending a defective rule with explanations that are at war with its text and stated justifications.”

Eli Lilly reiterates that it is likely to succeed on the merits of its claims and that it will suffer irreparable harm should the rule go into effect. As to the third preliminary injunction criteria, the balance of harms and the public interest, the plaintiff argues that the government’s suggestion that it has hurt “low-income patients amidst a global pandemic” is totally unsubstantiated.

Judge Sarah Evans Barker will hear oral argument tomorrow. The government, after its request to appear remotely was granted, will present its case via video conference.

The government defendants are represented by the U.S. Department of Justice’s Federal Programs Branch, and Eli Lilly by Faegre Drinker Biddle & Reath LLP and Kirkland & Ellis LLP.