Novartis Pharmaceuticals Corporation v. Johnson et al.

Why this Matters
The plaintiff argues that certain agency enforcement and regulatory actions requiring drug manufacturers to offer discounted prescription drugs to contract pharmacies under the 340B Drug Pricing Program without the ability to impose any sales conditions violate the Administrative Procedure Act. The growth of the 340B program and practices by certain providers and contract pharmacies have raised concerns about oversight and abuse of the program—to the tune of billions of dollars. In this appeal, defendants seek a ruling that plaintiff’s policy restricting contract pharmacies from purchasing drugs at the statutory ceiling price is unlawful, contrary to the summary judgment order below.

Potential Impact

Requiring drug manufacturers to offer discounted prescription drugs to certain contract pharmacies under the 340B Drug Pricing Program would remove one avenue to combatting potential abuse of the program.