A federal judge on Wednesday refused HHS' request to dismiss AstraZeneca's challenge to a December advisory opinion from Health and Human Resources Administration blocking drugmakers from charging a covered entity more than the ceiling price for 340B drugs.
U.S. District Judge Leonard Stark in Delaware didn't rule on the wisdom of the policy but said that the government's position on drugmakers' obligations under the 340B program had shifted over time. Congress didn't clearly address the issue of contract pharmacies when it created the drug discount program more than two decades ago, he said.
"Congress may very well want pharmaceutical manufacturers to deliver 340B drugs to an unlimited number of contract pharmacies as a condition for manufacturers' participation in the Medicare Part B and Medicaid programs. But that kind of policymaking is for Congress, not this Court," the judge wrote.
HHS had argued that drugmakers had always been required to deliver 340B drugs to an unlimited number of contract pharmacies. But Stark found that claim contradicted the agency's 1996 and 2010 advisory opinions. On the other hand, AstraZeneca claimed that the law required 340B providers to buy their discounted drugs from in-house pharmacies. Stark ruled that either interpretation was reasonable.
"When a statute does not even include a single reference to the pertinent word (e.g., 'pharmacy'), it is highly unlikely (if not impossible) that the statute conveys a single, clear and unambiguous directive with respect to that word," the opinion said.
Safety-net hospitals were disappointed by the decision, arguing that it would be harder for them to provide care to uninsured or underinsured patients if drugmakers' won.
"We will continue to oppose these harmful actions," Beth Feldpush, senior vice president of policy and advocacy for America's Essential Hospitals, said in a statement.
HRSA sent letters to six drugmakers last month, warning them that they could face steep fines if they don't discount drug prices for pharmacies that contract with 340B providers. That followed the December advisory opinion, which came in response to pharmaceutical companies aggressively cracking down on 340B drug discounts through contract pharmacies.
Drugmakers have been upset with the rapid growth of contract pharmacy usage and sought to restrict the discounts they provided to on-site pharmacies run by covered entities or a limited number of contract pharmacies if providers didn't have an on-site option. CVS, Walgreens, Walmart, Rite-Aid and Kroger make up 60% of all contract pharmacies under the 340B program.