A U.S. appeals court on Tuesday reinstated a whistleblower lawsuit accusing four major pharmaceutical companies of overcharging for medications supplied to low-income and uninsured patients, potentially costing federal and state governments hundreds of millions of dollars, according to Reuters.
The ruling from the 9th U.S. Circuit Court of Appeals in Pasadena, California, allows claims to proceed against AbbVie, AstraZeneca, Novartis and Sanofi. In a unanimous 3-0 decision, the court found the companies must face allegations that they violated the federal False Claims Act through their role in the long-standing Section 340B Drug Pricing Program, per Reuters.
The Section 340B program, established by Congress in 1992, enables certain healthcare providers to purchase drugs at reduced prices. In some cases, those prices can drop as low as one cent, a mechanism commonly referred to as “penny pricing,” according to Reuters. The lawsuit alleges that the drugmakers failed to comply with these pricing requirements over a period of years.
The case was brought by Adventist Health System/West, a nonprofit healthcare provider based in Roseville, California, which operates more than 440 hospitals and clinics. The organization claims that prolonged overcharges led Medicare and Medicaid to issue inflated reimbursements, according to Reuters. It also pointed to a policy shift in 2019, when the U.S. Department of Health and Human Services began imposing significant civil penalties for...
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