Eli Lilly and Johnson & Johnson Challenge US Over 340B Drug Discount Program

The pharmaceutical giants have filed lawsuits against HRSA over rejected proposals to modify the federal drug discounting system.

• Eli Lilly and Johnson & Johnson have both taken legal action against the Health Resources and Services Administration (HRSA) for rejecting their proposed changes to the 340B program.
• The 340B program, established in 1992, mandates drug manufacturers to offer discounted medications to healthcare providers that serve low-income populations.
• Both companies proposed a model where drugs would be sold at full price, with rebates provided later, arguing it would enhance transparency and adherence to the program's original goals.
• HRSA rejected these proposals, stating they were inconsistent with the 340B law, prompting the lawsuits from the drugmakers.
• Participation in the 340B program is essential for drug companies to receive funding from government health insurance programs like Medicare and Medicaid.

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Investopedia Benzinga