Because Relator was not “in essence” suing to enforce Section 340B, and, barring their claims would undermine the FCA, Adventist’s FCA claims against Manufacturers were not barred by Section 340B or the Supreme Court’s ruling in Astra.
The United States Court of Appeals for the Ninth Circuit has reversed and remanded the decision of the District Court that dismissed an FCA lawsuit against four drug manufacturers who were Section 340B Program participants. The lawsuit was brought after Adventist Health Systems of West (Adventist or Relator) determined that the Manufacturers were violating the price ceilings mandated under the Public Health Service Act’s Section 340B Program for drugs sold to certain health-care facilities (Covered Entities). Although the Manufacturers had argued (and the District Court agreed) that price ceiling violations could only be brought by Adventist via the Section 340B Administrative Dispute Resolution (ADR) process, the Appeals Coutt found that the lawsuit was not one to recover losses sustained by Adventist, but rather those of the government, and therefore their FCA lawsuit was not barred (U.S. ex rel. Adventist Health System of West v. Abbvie, Inc., No. 24-2180 (9th Cir. Mar. 17, 2026)).
The 340B Drug Program. The Section 340B Drug Pricing Program was created by Congress in 1992 to improve access to care for low-income and uninsured patients at safety-net hospitals and clinics. Specifically, the Section 340B Program provides a “penny pricing”...
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