Johnson & Johnson is asking a federal judge to declare its 340B rebate plan legal and prevent HHS and the Health Resources and Services Administration from taking any enforcement action against its implementation.
J&J announced its plan to replace upfront 34B discounts with the rebate plan in August, but HRSA told the company on Sept. 27 that it would initiate proceedings to terminate the drug maker's participation unless it halted the policy. HRSA said the rebate plan violates federal law.
That warning came after a Sept.17 letter from HRSA demanding that J&J cease plans to implement 340B rebates for certain drugs, specifically Stelara and Xarelto. Under the proposed model J&J planned to implement Oct. 15, some hospitals would be required to purchase the drugs at wholesale acquisition cost instead of under the 340B ceiling cost. HRSA rejected this approach, stating that it would force hospitals to pay more than the 340B ceiling price, in violation of the program's regulations.
The drug maker said in a Nov. 12 news release that its transparency model is legally permissible, uses commercially standard data validation practices and will help ensure compliance with Inflation Reduction Act requirements.
"HRSA's attempts to bar J&J from bringing transparency to the 340B Program through implementation of the rebate model are fundamentally at odds with the 340B statute, the Administrative Procedure Act, and HRSA’s own stated program integrity goals," J&J said in the lawsuit. "They are also entirely inconsistent with the approach that HRSA has taken regarding the replenishment models that covered entities unilaterally implemented more than a decade ago, even though replenishment models have many of the same features and operate in materially the same manner as J&J's proposed rebate model."
The HRSA declined to comment on the lawsuit.