Drug manufacturer Johnson and Johnson (J&J) filed a lawsuit against the Health Resources and Services Administration (HRSA, PDF) in the U.S. District Court for the District of Columbia on Nov. 12, challenging the legality of HRSA’s position that J&J is prohibited from using a rebate model to provide 340B pricing to disproportionate share hospitals (DSHs). The lawsuit comes after J&J withdrew its proposed rebate model for two drugs purchased through the 340B Drug Pricing Program, which was set to take effect Oct. 15, in response to HRSA letters threatening to take enforcement action against J&J [refer to Washington Highlights, Oct. 4].
In the legal complaint, J&J argued that the 340B statute allows drug manufacturers to provide 340B discounts either as up-front discounts or as retrospective rebates. Further, the drug manufacturer stated that using retrospective rebates will allow the manufacturer to ensure 340B program integrity and comply with provisions of the Inflation Reduction Act requiring manufacturers to provide the lower of the negotiated maximum fair price for a drug or the 340B price. J&J requested that the court vacate HRSA’s letters, declare that the J&J rebate model is lawful under the 340B statute, and enjoin HRSA from taking enforcement action if J&J implements its rebate model.
- Washington Highlights