Pharma gets a win in 340B drug discount case

Jan 31, 2023

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By Katherine Ellen Foley and David Lim

Presented by Pharmaceutical Care Management Association

With help from Daniel Payne

Driving the Day

Bottles of prescription drugs are ready for packaging and shipping after they were filled.

A court has ruled that Congress should set the terms of the 340B drug discount program. | George Frey/Getty Images

COURT OF APPEALS RULES FOR DRUGMAKERS IN 340B CASE — Pharmaceutical manufacturers got a victory from the Third Circuit Court of Appeals on Monday, with judges ruling providers could not use the 340B drug discount program through an unlimited number of contract pharmacies.

The case, between Sanofi Aventis and HHS, stemmed from over a decade of shifting rules about how and where drug companies must offer discounts for certain providers.

HHS argued the program should allow hospitals to get discounts through an unlimited number of contract pharmacies (and that it should be able to enforce such a policy).

The court rejected that claim, saying Congress, not providers or HHS, sets the terms of the program.

“Statutory silences, like awkward silences, tempt speech,” Judge Stephanos Bibas, one of the three judges, wrote in the court’s opinion. “But courts must resist the urge to fill in words that Congress left out.”

But the court also suggested drug companies would be required under the law to allow the discounts for at least one contract pharmacy where no other options are available — a detail some providers welcomed.

Maureen Testoni, president and CEO of provider group 340B Health, said in a statement the group was “encouraged by the court’s recognition that companies must offer their drugs at 340B pricing to all eligible covered entities,” adding that they “respectfully disagree” with the court’s ruling on how many pharmacies must be included in the discounts.

Other groups are looking to future appeals for more favorable rulings.

“We expect the two other courts of appeals that are currently considering the issue will agree,” Chad Golder, deputy general counsel for the American Hospital Association, said in a statement. “The only result of this decision will be even greater profits for drug companies and reduced access to medicines for patients.”

Still, Monday’s win for pharmaceutical companies is largely seen as a loss for the hospitals and clinics that get the discount, with the stage now set for them to be more limited in where they can get the program’s discounts.

“PhRMA filed an amicus brief in this matter urging this result, and we appreciate the court’s careful consideration of contract pharmacy participation in the 340B program,” PhRMA spokesperson Nicole Longo said in an email. “As stated in our brief, ‘the program today bears little resemblance to the one Congress enacted — and contract pharmacies have been one of the primary drivers of that radical transformation.’”

IT'S TUESDAY. WELCOME TO PRESCRIPTION PULSE. Huge congrats to Prescription Pulse co-author Lauren Gardner, who welcomed a new daughter to the world on Thursday, Jan. 26.

Send tips and feedback to David Lim (dlim@politico.com or @davidalim) or Katherine Ellen Foley (kfoley@politico.com or @katherineefoley).

TODAY ON OUR PULSE CHECK PODCAST, your co-host talks with Megan Wilson about the rumors spooking health care lobbyists on K Street about incoming Senate HELP Committee Chair Bernie Sanders.

Listen to today’s Pulse Check podcast

A message from Pharmaceutical Care Management Association:

Pharmacy benefit managers, PBMs, strongly support biosimilars. They increase competition, provide health plans greater choice, and lower patient drug costs. New research confirms that once multiple biosimilars reach the market, prices decline and coverage increases. Learn more about the benefits of a competitive biosimilar market and how PBMs’ policy recommendations would increase patient access to biosimilars and enable PBMs to secure greater prescription drug savings for employers, health plans, and ultimately patients and taxpayers.

Industry Intel

AbbVie's drug Humira is pictured.

Competition for AbbVie's Humira goes on the market today. | David J. Phillip/AP Photo

HUMIRA COMPETITION DAY — The first biosimilar competition to AbbVie blockbuster Humira is allowed to enter the market today, years after the company reached a settlement with Amgen in 2017 that permits marketing of its biosimilar Amjevita.

However, other biosimilar competition to the anti-inflammatory medication — which brought in more than $20 billion in sales for AbbVie in 2021 — will not be allowed to enter the market until July.

Coronavirus

BIDEN ADMIN TO END COVID PHE IN SPRING — On Monday, the White House said it will end the Covid-19 national and public health emergencies on May 11, POLITICO’s Adam Cancryn reports. The disclosure is in response to two House Republican measures aimed at immediately ending the emergencies, which it referred to as “a grave disservice to the American people” in a statement.

The move would restructure the federal government’s coronavirus response and unwind a sprawling set of flexibilities put in place nearly three years ago.

“This decision is based on what is best for the health of our country at this time,” a senior White House official told Adam. “We’re in a pretty good place in the pandemic, we’ve come through the winter, cases are down dramatically from where they were the past two winters.”

JOIN POLITICO ON 2/9 TO HEAR FROM AMERICA’S GOVERNORS: In a divided Congress, more legislative and policy enforcement will shift to the states, meaning governors will take a leading role in setting the agenda for the nation. Join POLITICO on Thursday, Feb. 9 at World Wide Technology's D.C. Innovation Center for The Fifty: America's Governors, where we will examine where innovations are taking shape and new regulatory red lines, the future of reproductive health, and how climate change is being addressed across a series of one-on-one interviews. REGISTER HERE.

Eye on the FDA

FDA PROPOSES EASING BLOOD DONATION RESTRICTIONS FOR SOME LGBTQ+ MEN — The FDA issued a draft policy Friday that proposes easing restrictions on blood donation from some men who have sex with men, your hosts report.

Should the guidance be finalized as expected, gay and bisexual men would be eligible to give blood if they complete an individual questionnaire and report they have not had sex with a new partner or multiple people in the past three months, provided they also do not have other HIV-risk factors like using nonprescription intravenous drugs.

All people who have had a new partner or partners and have engaged in anal sex in the last three months would need to defer their donations. Previously, policies required all men who have sex with men to abstain for three months before donating blood.

MEDICAL DEVICES

DEVICE INDUSTRY LOBBIES OIRA ON EtO REG UNDER REVIEW — The medical device industry is ramping up efforts to influence an EPA proposal under White House review to limit emissions of ethylene oxide, a carcinogenic gas, used to sterilize their products that companies worry might lead to shortages and disrupt the U.S.’ ability to sterilize millions of essential medical devices.

Sterigenics was scheduled to meet with the Office of Information and Regulatory Affairs on Monday, the Midwest Sterilization Corporation is set to meet today and the Ethylene Oxide Sterilization Association is slated for a meeting on Friday.

A message from Pharmaceutical Care Management Association:

Tobacco

FTC: CIGARETTE SALES DECREASED FROM 2020 TO 2021 — A new report from the Federal Trade Commission found that cigarette sales to wholesalers and retailers decreased from 203.7 billion in 2020 to 190.2 billion in 2021. Simultaneously, menthol cigarettes occupied 37 percent of the cigarette market in 2021, the highest share they have ever occupied.

The FDA is expected to finalize rules that would ban the sale of menthol cigarettes and flavored cigars later this year.

Pharma Moves

Eric Lander, the former director of the White House Office of Science and Technology Policy, will return to the Broad Institute of MIT and Harvard as a core institute director. He will also serve as a tenured faculty member at both institutions.

Ed Shenkan joined the FDA Center for Devices and Radiological Health last month as associate director for the Total Product Life Cycle Advisory Program. Troy Tazbaz is joining the agency as the new director of the Digital Health Center of Excellence.

Quick Hits

Several EU countries are experiencing shortages of key drugs, including antibiotics and cough syrup, POLITICO EU’s Carlo Martuscelli reports.

For Wired, Max G. Levy writes about the researchers who found that rodent immune cells can long outlive their animal hosts.

A message from Pharmaceutical Care Management Association:

PBMs are strong proponents of a functioning biosimilar market that will increase competition for biologic drugs and provide added choice for health plans and patients. New research confirms that biosimilar competition drives prices lower, leading to increased coverage. Over time, PBMs can more effectively leverage competition to further reduce drug costs for health plans and patients.

The promise of biosimilars in the United States can only be realized if barriers delaying the emergence of competitive biosimilars are eliminated. Too often drug manufacturers take advantage of barriers in the current system. Policies allowing for patent abuse to block access to biosimilars cost American patients $7.6 billion in lost savings since 2015. To unlock the savings potential of biosimilars PBMs support policies that will allow for greater biosimilar adoption.

Learn more about the benefits of a robust biosimilar market and how PBMs’ policy recommendations would increase patient access to biosimilars.

Document Drawer

The tentative Democratic members of the House Ways and Means and E&C subcommittees for the 118th Congress were announced last week.

On Monday, the FDA published final guidance on the surveying, leveling and alignment of laser products.

U.S. District Court for the Southern District of Florida entered a consent decree on Monday against LGM Pharma, a Florida-based importer and distributor of active pharmaceutical ingredients.

JOIN TUESDAY TO HEAR FROM MAYORS AROUND AMERICA: 2022 brought in a new class of mayors leading “majority minority” cities, reshaping who is at the nation’s power tables and what their priorities are. Join POLITICO to hear from local leaders on how they’re responding to being tested by unequal Covid-19 outcomes, upticks in hate crimes, homelessness, lack of affordable housing, inflation and a potential recession. REGISTER HERE.