This overview is excerpted from Manatt on Health, Manatt's subscription service that provides in-depth insights and analysis focused on the legal, policy and market developments.
On May 21, the U.S. Court of Appeals for the District of Columbia Circuit upheld the right of pharmaceutical manufacturers to place at least some restrictions on the shipment of 340B drugs to contract pharmacies of 340B covered entities. The decision, in Novartis Pharmaceuticals Corporation v. Johnson, echoed a similar decision by another appeals court in January 2023 in Sanofi Aventis U.S. LLC v. United States Department of Health and Human Services. In that decision, the Third Circuit held that the 340B statute does not require delivery of 340B drugs to an unlimited number of contract pharmacies.
In the short term, the most immediate question is whether the federal government will appeal this decision. In the longer term, the question is whether this decision will spur Congress to take action to amend the 340B statute. In the meantime, a decision is still pending in a similar case in yet another court of appeals—the Seventh Circuit, in Eli Lilly and Company v. Becerra. A decision in that case could come at any time.
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