Eli Lilly follows JNJ in suing govt. over 340B drug-discount program

Eli Lilly (NYSE:LLY) has filed a lawsuit over a U.S. health agency’s alleged attempts to block its model for offering rebates for drugs supplied under the government’s 340B Program, days after its rival Johnson & Johnson (NYSE:JNJ) filed a similar lawsuit.

In the lawsuit filed against the Health Resources and Services Administration (HRSA) in a DC federal court on Thursday, the Indiana-based pharmaceutical giant alleged that the HRSA “without reason or process” attempted to block its cash replenishment model for 340B-covered entities.

Drugmakers participating in the HHS’ 340B Program are required to offer discounts for costly outpatient drugs supplied to healthcare providers serving uninsured and low-income patients.

LLY’s model, designed to make weekly cash payments directly to healthcare providers, “aims to prevent abuses seen in the current program, ensuring compliance with existing laws and new requirements under the Inflation Reduction Act,” the company said.

“Lilly brought this lawsuit because HRSA does not have the authority to arbitrarily reject this model, which serves the original goals of the 340B program and improves transparency, efficiency, and program integrity,” the company added.

Early this week, J&J (NYSE:JNJ) filed a lawsuit accusing HHS of rejecting its attempt to tighten the way it offers discounts under the 340B Program for its blood thinner Xarelto and psoriasis treatment Stelara.