Eli Lilly recently announced it will end 340B pricing for some hospitals that have not shared data proving they’re not double-dipping discounts, but provider groups are pushing back.
Lilly told providers in January to submit claims data for all dispensed 340B drugs, claiming it’s a “lawful, modest integrity measure.” But the company only recently started suggesting it would enforce the policy by withholding discounts.
Lilly is asking for de-identified line-level dispensing data: which drug, NDC, quantity, date, dispensing site, and enough linkage to tie it to a specific covered entity and often a specific contract pharmacy.
According to Eli Lilly, nearly 1,000 hospitals have refused to submit the data, while more than 2,300 have complied. The company says it’s now starting enforcement with the largest holdouts. Notably, of the 50 largest holdouts Lilly says it contacted in early May, 11 didn't respond and 13 held meetings that yielded no commitments.
In response, the AHA send letters to HRSA voicing its concerns about the administrative burden stemming from Lilly’s new policy as well as a similar policy announced by Novo Nordisk. The association argues that Congress put the onus for 340B oversight on HHS, not individual drugmakers.
For its part, Eli Lilly’s legal counsel argues that existing guidance allows manufacturers to request information needed to avoid drug diversions and duplicate discounts.
So What?
If Eli Lilly’s new requirements inspire similar moves by other drugmakers (as it appears to be doing), contending with multiple overlapping integrity programs subject to the whims of different drugmakers could impose significant administrative burden. It’s possible the drugmakers’ intent is to simply put up more hoops for providers to jump through in an attempt to discourage discounts at the margin.
If drugmakers do get their hands on this claims data, they could use it for more than just duplicate discount detection: it could let them quantify the contract-pharmacy spread hospitals capture, build the empirical case for narrowing 340B, and gain competitive demand intelligence on high-value drugs like Mounjaro and Zepbound.
HRSA has stayed on the sidelines since January despite hospital groups pressing it to declare the policy unlawful and assess civil monetary penalties. Its attention is largely consumed by the revamped 340B rebate pilot, expected to publish this summer. The near-term remedy for a cut-off entity is the 340B Administrative Dispute Resolution process—slow and entity-by-entity, not a system-wide stay.
No court has yet ruled on whether a manufacturer may suspend 340B pricing for failure to submit claims data, and prior contract-pharmacy precedent has generally favored manufacturers' latitude to impose conditions. Litigation is likely, but a quick hospital win is not assured.