Eli Lilly And Co. (NYSE:LLY) has filed a lawsuit against the Health Resources and Services Administration (HRSA). The pharmaceutical giant claims that HRSA obstructed its attempt to alter drug discount offerings to hospitals.
What Happened: As per Eli Lilly’s official statement on Thursday, the conflict centers on the federal 340B program, which requires drug manufacturers to offer discounts to healthcare providers serving low-income communities. Participation in this program is crucial for drug companies to secure funding from government health insurance programs like Medicare and Medicaid.
Eli Lilly proposed a plan to ensure 340B entities pay no more than the ceiling price by providing them with cash directly on a weekly basis. However, HRSA, a division of the U.S. Health and Human Services Department, rejected this approach, stating it was inconsistent with the 340B law.
“HRSA does not have the authority to arbitrarily reject this model, which serves the original goals of the 340B program and improves transparency, efficiency, and program integrity,” the statement read.
See Also: Trump’s Potential ‘Health Czar’ Robert F. Kennedy Jr. Rattles Vaccine Stocks: ‘Shoot First Reaction’
Price Action: Eli Lilly was down by 0.28% during pre-market hours on Friday at the time of writing, as per Benzinga Pro.
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