An appeals court in the US has said that AbbVie, AstraZeneca, Novartis, and Sanofi will have to defend claims they defrauded federal and state government programmes that supply medicines to low-income and uninsured people.
The US Court of Appeals for the Ninth Circuit in Pasadena, California, denied efforts by the pharma companies to dismiss the whistleblower lawsuit brought under the False Claims Act (FCA), which alleges that they overcharged hospitals and clinics supplying medicines under the Section 340B programme.
First created in 1992, 340B requires pharma manufacturers to sell outpatient drugs at significantly discounted prices to eligible "covered entities (CEs)," mainly 'safety-net' hospitals and clinics serving deprived populations.
The lawsuit filed by Adventist Health System/West – a non-profit group representing CEs in California – is claiming that the pharma companies' overcharging led to inflated reimbursement payments from the federal Medicare and Medicaid programmes before the 340B programme was amended in 2019 to include hefty fines for pricing violations.
Specifically, it claims that they knowingly charged prices for drugs that exceeded the statutory ceiling, the maximum price manufacturers can charge CEs for drugs, calculated as the average manufacturer price (AMP) minus the required rebate.
The pharma companies had argued that Adventist had no right of action in this case because disputes over 340B payments should be pursued under administrative...
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