J&J sues government over 340B proposal; AHA says J&J's legal arguments 'completely meritless'

Johnson and Johnson Nov. 12 filed a lawsuit against the Department of Health and Human Services and the Health Resources and Services Administration asking a federal court in Washington, D.C., to declare J&J's proposed 340B rebate model legal and block the government's attempts to prohibit its implementation.

In a statement shared with the media Nov. 12, AHA General Counsel Chad Golder said, "After failing to persuade HRSA and a bipartisan group of nearly 200 members of the House of Representatives, Johnson & Johnson's attempt to convince the Judiciary will fare no better. J&J's legal arguments are completely meritless. We look forward to the courts rejecting J&J's plan to put profits over people."

On Aug. 23, J&J announced that it would be upending its approach to 340B pricing for two of its most popular products, Stelara and Xarelto. Historically, J&J offered upfront discounts to 340B hospitals when they purchased these drugs. However, J&J's proposal would require all disproportionate share hospitals participating in the 340B program to purchase these drugs at full price and apply for a rebate from J&J. Under J&J's proposal, these hospitals would be required to submit certain data to J&J when they purchase the drugs at full price. After J&J verified the drug's 340B status, it would send DSHs a rebate for the difference between the amount paid and the discounted 340B price.

Immediately after J&J announced its proposal, AHA expressed concern and said HRSA should take "immediate enforcement action," including assessing civil monetary penalties on J&J for intentionally overcharging 340B hospitals.

J&J Sept. 30 said it was ceasing implementation of its 340B rebate proposal.