Audio (00:04):
Welcome to 340B Insight from 340B Health.

Myles Goldman (00:12):
Hello from Washington D.C. and this is a breaking news edition of 340B Insight, the podcast about the 340B drug pricing program. I'm Myles Goldman with 340B Health. On December 11, five national hospital organizations, including 340B Health, a hospital pharmacist organization, and three individual 340B hospitals filed a lawsuit against the Department of Health and Human Services. Maureen Testoni, the president and CEO of 340B Health is here with us to explain this lawsuit.

Myles Goldman (00:48):
Maureen, welcome back to 340B Insight and thank you for joining us.

Maureen Testoni (00:53):
Hello, Myles. Thank you for having me.

Myles Goldman (00:56):
As I just noted, 340B Health is one of the organizations that filed a joint lawsuit last week against the Department of Health and Human Services. Recap for our listeners the background that brought us to this day.

Maureen Testoni (01:09):
Sure, Myles. This all started over the summer with Lilly, Lilly dock providing 340B pricing on one of their drugs when it was dispensed through a community-based contract pharmacy. And they did that with one drug and then they expanded it. And HRSA didn't stop them from doing it. HRSA went ahead and posted on their website that this is what Lilly was going to do and they told us that there wasn't much that they could do to enforce to stop Lilly from doing this. Shortly after that, a bunch of other companies that started to do the same thing too.

Maureen Testoni (01:46):
Right now we're at six, and the other companies are AstraZeneca, Sanofi, Novartis, United Therapeutics, and Novo Nordisk. All of those companies have either stopped providing 340B pricing for drugs dispensed through community-based contract pharmacy or have announced their intention to do so soon. Now, this goes without saying is hugely, hugely harmful to 340B hospitals. As you know, 340B hospitals, in order to get into the program at all, they have to be able to show that they serve a lot of low-income patients or they're in a more isolated rural community.

Maureen Testoni (02:25):
So something like this is really harming those hospitals and obviously the patients that they serve. But we also believe it's unlawful. This is not consistent with the statute. The statute is very clear. It requires, as a condition to participate in Medicaid and Medicare Part B, manufacturers agree to give 340B hospitals a discount on drugs. And there's nothing in the statute that says they only have to give the discount if they like where the drugs are dispensed. There's no way for manufacturers to get out of their statutory obligation.

Maureen Testoni (03:05):
And many hospitals really rely on the savings they obtain through their partnerships with the pharmacies in their communities. They rely on those savings to help them expand services for their low-income populations. As a result, we and several other organizations have called on the Department of Health and Human Services to exercise its authority and put a stop to these actions. So in other words, enforcing statute and require manufacturers to start providing the 340B discounts for drugs that are dispensed through these community pharmacies.

Maureen Testoni (03:42):
We also had more than a thousand of our member hospitals write to Secretary Azar about this and more than half of members of Congress, which is hundreds of members of Congress, have also written to Secretary Azar are asking him to intervene. But they have not done so, and instead, they are letting this continue and that's why we went to court.

Myles Goldman (04:05):
Can you walk our listeners through what the lawsuit asks the court to do?

Maureen Testoni (04:11):
First, we're going to show the court that HHS has the authority and the responsibility to enforce this 340B statute to protect hospitals and patients. The lawsuit asks the court to order HHS to require manufacturers to provide 340B pricing on the covered drugs dispensed at community pharmacies and refund to hospitals the money that they lost as a result of the manufacturers' actions. They complaint also asked for an order requiring HHS to refer the matter to the Office of the Inspector General.

Maureen Testoni (04:45):
Now, the Office of the Inspector General has the ability to assess civil money penalties for manufacturers that are intentionally avoiding the requirements of the statute. I just want to take a moment to thank our co-plaintiffs in this action. We're really happy to have been joined by several national organizations, the American Hospital Association, the Association of American Medical Colleges, America's Essential Hospitals, the Children's Hospital Association, and the American Society of Health-System Pharmacists.

Maureen Testoni (05:17):
We're also joined by three of 340B Health member hospitals, including St. Mary's Medical Center in San Francisco, which is a part of the CommonSpirit Health System, Avera St. Mary's Hospital in Pierre, South Dakota, and Riverside Regional Medical Center in Newport News, Virginia. These three hospitals, along with all of our member hospitals, have been significantly harmed by the actions of these manufacturers.

Myles Goldman (05:46):
With the lawsuit filed, what are the next steps in the case?

Maureen Testoni (05:50):
The lawsuit has been filed in the U.S. District Court for the Northern District of California. There are deadlines that go into effect where the government will answer the pleadings that we filed and then we will reply. And we anticipate that there would be hearings on the case that could take place within the next few months.

Myles Goldman (06:11):
There is going to be a new administration on January 20th and that will mean a new HHS secretary. How does a new secretary affect the lawsuit 340B Health and the other organizations filed?

Maureen Testoni (06:25):
Well, we're really looking forward to working with the new administration and educating them what has been going on in this area and what the impact is on the 340B hospitals and the patients that they serve. It could make a big difference, because really this whole issue can be fixed when the secretary of HHS actually enforces the statute. Once they take that action, then the manufacturers would have to start providing 340B discounts again.

Maureen Testoni (06:59):
We're hoping to be able to work with the new administration and to educate the new administration on this issue. And hopefully we will be able to provide with a positive outcome.

Myles Goldman (07:09):
Thank you, Maureen, for bringing our listeners up to speed on this important development. Maureen will join us again next week in our final episode of 2020 to provide further analysis of the lawsuit. She also will discuss other major issues affecting 340B hospitals and what it means for 2021. If you have any questions or topics you'd like us to cover on 340B Insight, please email us at podcast@340bhealth.org. Until next week, thanks for listening and be well.

Audio (07:49):
Thanks for listening to 340B Insight. Subscribe and rate us on Apple Podcasts, Google Play, Spotify, or wherever you listen to podcasts. For more information, visit our website at 340bpodcast.org. You can also follow us on Twitter @340BHealth and submit a question or idea to the show by emailing us at podcast@340bhealth.org.