On February 10, 2025, BIO filed an amicus brief in the U.S. District Court for the District of Columbia, supporting the lawfulness of plaintiff Eli Lilly's proposed 340B rebate model. The 340B Drug Pricing Program ("340B"), through which Medicaid-participating pharmaceutical manufacturers sell outpatient drugs at discounted prices, has expanded to become the second largest federal drug program.
Eli Lilly's proposed model is a cash replenishment model requiring the submission of claims data, after which the 340B price would be provided via a rebate. The permissibility of this model was challenged by the U.S. Health Resources and Services Administration (HRSA)—the Health and Human Services (HHS) entity responsible for administering the 340B program. However, as explained in the brief, the model is permissible, as seen with similar models already employed by other federal health care programs.
The brief contends that the proposed rebate model helps maintain program integrity, thwarting instances of duplicate discounting and diversion, statutory violations that not only occur regularly, but continue to go untreated by HRSA. When these violations are not curtailed, pharmaceutical companies face substantial harm, and the corresponding benefits to patients, particularly those that are lower-income and the target population of the 340B program, go unrealized.
On June 25, 2025, BIO filed an amicus brief asserting similar arguments in the U.S. Court of Appeals for the District of Columbia Circuit. This brief was in support of plaintiff Novartis’s proposed 340B rebate model.