Hospital groups urge appeals courts to uphold 340B requirements in contract pharmacy cases

The AHA, 340B Health, America’s Essential Hospitals, Association of American Medical Colleges, and Children’s Hospital Association yesterday urged the U.S. Courts of Appeals for the 3rd and District of Columbia Circuits to require drug companies to fulfill their legal obligations to provide 340B discounted drugs to eligible hospitals and health systems, regardless of whether the drugs are dispensed on site or through contract pharmacies.  
  
After providing 340B discounts through both in-house and contract pharmacies since the beginning of the program, appellants and other major drug companies began to “substantially cut the 340B benefit to certain public and not-for-profit hospitals,” the organizations note in friend-of-the-court briefs filed in Sanofi-Aventis U.S. v. HHS et al.  and Novartis-United Therapeutics Corp. v. Johnson. 
  
More than half of 340B hospitals report they do not operate in-house retail pharmacies, and only one in five have their own specialty pharmacy, the briefs note, making contract pharmacies “a necessary and beneficial component of the 340B program.” 
  
The briefs go on to explain that the 340B program “cost the profitable drug companies a drop in the bucket, but provide an indispensable lifeline for 340B hospitals. That program is under attack by the highly profitable pharmaceutical industry. But neither the statute nor the drug companies’ mischaracterizations provide a basis to decimate the program as these companies are doing.”