Eli Lilly (LLY, Financial) has filed a lawsuit against the U.S. Health Resources and Services Administration (HRSA), claiming the agency is attempting to unfairly block its specific discount model for drugs supplied under the government's 340B program. Previously, Johnson & Johnson (JNJ) initiated a similar lawsuit.
In the lawsuit filed in federal court in Washington, D.C., Lilly alleges that HRSA lacks a reasonable basis or procedure to halt its cash supplementation model for 340B-covered entities. The 340B program mandates pharmaceutical companies to provide discounts on expensive outpatient drugs to healthcare providers serving uninsured and low-income patients.
Lilly's cash supplementation model involves weekly direct cash payments to healthcare providers. This approach aims to prevent abuse in the current program and ensure compliance with existing laws and new requirements under the Inflation Reduction Act. Lilly emphasizes that HRSA has no authority to arbitrarily reject this model, which aligns with the 340B program's intent of increasing transparency, efficiency, and program integrity.
Earlier this week, Johnson & Johnson also filed a lawsuit accusing the U.S. Department of Health and Human Services (HHS) of denying its request to modify its discount approach for its drugs Xarelto and Stelara under the 340B program.
