letters g29b225827 1920

Earlier today, HRSA sent letters to Eli Lilly, AstraZeneca, Novartis, Novo Nordisk, Sanofi, and United Therapeutics alerting them that the agency has notified the HHS-Office of the Inspector General (OIG), “in accordance with the 340B Ceiling Price and Civil Monetary Penalties Final Rule” (CMP Rule), regarding the manufacturers continued refusal to honor contract pharmacy arrangements.  HRSA’s referral to the HHS-OIG is a follow-up to HRSA’s May 17, 2021 letter to each of the manufacturers notifying them that their unlawful contract pharmacy policies have resulted in overcharges to covered entities that could subject the manufacturers to CMPs.  Today’s letters and the May 17 letters can be found on HRSA’s Program Integrity webpage at https://www.hrsa.gov/opa/program-integrity/index.html.

The CMP Rule subjects manufacturers to CMPs of up to $5,000 for each instance of “knowingly and intentionally” charging a covered entity more than the 340B ceiling price.  Manufacturers are also required to refund overcharges to covered entities under the 340B statute.  Presumably, HHS-OIG will now review the manufacturers’ actions to determine if the manufacturers knowingly and intentionally overcharged covered entities and, if so, the amount of the CMPs.

Each of the six manufacturers have filed a lawsuit against HHS challenging HRSA’s longstanding policy that the 340B statute requires manufacturers to honor 340B contract pharmacy arrangements.  The lawsuits also claim that the May 17 letter is unlawful and ask the court to prohibit HHS from taking any enforcement against the manufacturer in connection with HRSA’s contract pharmacy policy.