J&J suffers a loss over 340B drug discount program

In a setback to Johnson & Johnson, a federal judge ruled that a U.S. government agency did not violate the law when it required the company to seek approval before offering rebates to hospitals and clinics that participate in a drug discount program.

The decision marks the second time in as many months that a federal court sided with the U.S. Health Resources and Services Administration, which last year pushed back against plans by several drug makers to alter their payment models for the 340B Drug Discount Program. Last month, a different judge reached the same decision in lawsuits brought by Eli Lilly, Bristol Myers Squibb, and Novartis.

“Based on the plain and unambiguous language of the 340B statute, and supported by its purpose and history, HRSA has the authority to provide for discounts, rebates, or both. This conclusion defeats J&J’s claim that HRSA lacked the authority to require prior approval of J&J’s rebate model,” U.S. District Court Judge Rudolph Contreras wrote in his decision.