Tampa General Hospital has sued Eli Lilly, alleging the drugmaker unlawfully cut off discounts under the federal 340B drug pricing program after the hospital refused to provide newly required prescription-level claims data through Lilly’s reporting platform.
Because of the new requirement, Tampa General alleges Lilly is engaging in “exploitation of safety-net hospitals” and “abuse of market power” while “lining its pockets with illegal profits on drug sales allocated to the needy,” according to the complaint.
The lawsuit, filed July 2 in U.S. District Court in Tampa, claims TGH now pays 25% to 50% more on average for Eli Lilly medications, with some costing substantially more. The hospital says the higher costs could total tens of millions of dollars annually and have already affected some patients' access to medications.
According to the complaint, Eli Lilly is the sole manufacturer of several medications that TGH dispenses, leaving the hospital little choice but to pay the higher prices.
The 340B program requires drug manufacturers that participate in Medicaid to sell outpatient drugs at discounted prices to eligible safety-net hospitals and clinics. The savings are intended to help the health providers stretch resources while providing care to uninsured, low-income and other vulnerable patients.
Eli Lilly announced this year that hospitals would have to submit detailed prescription claims data through the company’s 340B Electronic Submission Platform (ESP) to continue receiving discounted prices. The data would include information about each drug dispensed, including the transaction and billing details.
Tampa General’s lawsuit argues that the drugmaker is improperly demanding sensitive information, that federal law does not allow drugmakers to impose the ESP requirement and that the demand violates the Florida Deceptive and Unfair Trade Practices Act.
TGH is asking the court to restore its 340B discounts, block Eli Lilly’s reporting requirement and award damages for the higher costs the hospital says it has incurred.
Eli Lilly, which began enforcing the requirement in June, has said its reporting protocol is necessary to prevent "duplicate discounts and other program abuses."
The action drew swift pushback from hospitals and industry groups, including the American Hospital Association and the American Medical Association, which urged federal officials to intervene. Including Tampa General, about 3,000 hospitals took advantage of the 340B discounts.
