On December 16, Sanofi informed HRSA that it will pause the implementation of its rebate model, termed a “340B credit model.”  The same day, Sanofi filed a lawsuit in the U.S. District Court for the District of Columbia against HRSA to challenge HRSA’s authority to determine that its rebate model is impermissible.

Sanofi’s letter to HRSA states that it believes that HRSA’s “threatened imposition of . . . penalties would not survive scrutiny” but that it will not implement the model at this time due to the threat of these penalties. The manufacturer stated that it “looks forward to settling this matter in court.” Sanofi’s announcement comes three days after HRSA  issued a letter to Sanofi calling for the manufacturer to cease implementation of its rebate model. HRSA gave Sanofi a deadline of December 20, 2024 to inform the agency of its intentions to halt implementation of the model.

Sanofi’s lawsuit follows similar lawsuits by Bristol-Myers Squibb, Johnson & Johnson, Eli Lilly, and Kalderos challenging HRSA’s position that their proposed rebate models are impermissible. Each of the lawsuits allege that HHS cannot require pre-approval of a rebate model, that its disapproval is arbitrary and capricious, and that its position violates manufacturers’ due process rights. 340B covered entities disagree strongly with manufacturers’ positions and contend that rebate models are contrary to the 340B statute.

 The Powers 340B team will continue to monitor any additional developments.