A federal judge in Maryland has rejected a request from drugmakers and industry group PhRMA to stop a Maryland law that would lift restrictions on the amount of discounts directed at hospitals serving low-income or uninsured patients.
The decision handed down Thursday throws cold water on industry representatives’ request for a preliminary injunction. The case was originally brought by Novartis but has since added AbbVie, AstraZeneca and PhRMA as plaintiffs. The groups argue that Maryland law HB 1056 unlawfully forces the companies to accept an unlimited number of transactions that fall under the umbrella of the federal drug discount program known as 340B.
That law allows select hospitals that treat lower-income patients to buy prescription drugs at a discount. The goal is for cash-strapped hospitals to have more financial flexibility, but pharma companies have seen the 340B program balloon in size.
In its initial complaint, Novartis argued that Maryland’s law is so vast that it preempts federal law, namely by asking the company to make drugs available that are outside of the scope of 340B and to do so before exclusivity ends.
“Absent immediate judicial intervention enjoining H.B. 1056, Novartis will suffer irreparable harm,” lawyers for the company wrote in their May complaint.
The contentious case is just the latest in a line of battles over the parameters of the 340B program. The recent Supreme Court ruling on Chevron has added more urgency for lawmakers to find a legislative fix, given the subjectivity of the law in the eyes of drug manufacturers, hospitals and state lawmakers. The Chevron ruling upended precedence that empowered agencies’ interpretations of specific statutes.
Senators have been working to do just that, but efforts have been delayed. A bipartisan group of Senators had planned to release a more updated draft in early August but failed to do so. A group of Republican lawmakers on the House side introduced a bill in late May that seeks to rein in how hospitals use the 340B program, including allowing HHS to audit how health systems are using it and creating a definition of patients that are covered under the program.