HHS Hits Back in Eli Lilly Drug Pricing Case

The U.S. Department of Health and Human Services (HHS) and the individual administrators defending lawsuits lodged by major pharmaceutical companies over the agency’s decision to expand the 340B Drug Pricing Program have filed an opposition to plaintiff Eli Lilly’s motion for a preliminary injunction. 340B Program changes initiated at the tail-end of last year have recently been the subject of several federal lawsuits, which have so far yielded multiple injunctions prohibiting the HHS from enforcing or implementing the law.

The Southern District of Indiana opposition first explains the underlying intent of the challenged rule. According to the HHS, Congress compromised with drug companies by creating the 340B Program wherein participating manufacturers would gain valuable access to coverage for their products under Medicaid and Medicare Part B in exchange for providing discounted drugs to certain safety-net healthcare providers. The program allows providers to generate essential revenue, while facilitating affordable prescriptions for vulnerable patient populations the HHS claims.

In its opposition, the defendants claim that Eli Lilly, leading a “cohort of large, highly profitable pharmaceutical companies,” seeks to “unilaterally ( ) upend the decades-old, settled operation of a statutory program.” The 48-page filing first details the statutory framework’s history and the 2020 decision by several drug manufacturers to no longer honor discounted-drug orders placed by eligible healthcare providers but shipped to, and dispensed by, outside pharmacies, allegedly as a means of circumventing the 340B Program.

The opposition then explains why the plaintiff cannot succeed on the merits, will not suffer irreparable harm, and that the balance of the equities weighs against the injunction. Of particular note is HHS’s characterization of the plaintiff’s intention with the suit, “to have this Court sanction Lilly’s rewrite of its statutory obligations in a way that would drastically restrict many providers’ access to discounted drugs (and, in so doing, boost Lilly’s profits).”

The hearing is scheduled for Feb. 26, in-person, in Indianapolis, Indiana.

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