Federal court denies Novartis suit to stop RI regulating drug discounts
In a David vs Goliath scene, a global drugmaker had attempted to stop the law from going into effect in Rhode Island
Here is why America pays more on medicines than other countries.
The patent system, consolidation within the healthcare supply chain, and pharmacy benefit managers create one of the most exorbitant drug markets.
A new law regulating a federal drug discount program in Rhode Island went into effect on Wednesday, Oct. 1, after a District Court judge denied a preliminary injunction requested by a pharmaceutical manufacturer.
The law prohibits reimbursement discrimination against organizations, including contract pharmacies, covered by the 340B Drug Pricing Program.
The program, established in 1992, allows qualifying medical facilities to buy drugs at a discounted rate from pharmaceutical companies so they can provide these at a lower cost or free to patients or resell them to create a revenue stream.
Medical facilities, such as hospitals and community health centers, said they rely on the revenue generated from the program to provide services for patients, but pharmaceutical companies have restricted the number of pharmacies medical facilities can contract with. The losses from the pharmaceutical companies’ restrictions amount to millions of dollars and have led to layoffs in Rhode Island.
On Aug. 12, Novartis, a global drugmaker, filed a complaint against Rhode Island’s attorney general and auditor general, claiming the law, which aims to protect medical facilities from such restrictions imposed by pharmaceutical companies, would cause “irreparable harm” to it.
John J. McConnell Jr., chief judge of the U.S. District Court of Rhode Island, however, on Sept. 30 denied Novartis’s request for a preliminary injunction, allowing Rhode Island’s law to go into effect.
Attorney General Peter Neronha thanked McConnell for protecting “340B covered entities in Rhode Island from arbitrarily imposed restrictions from drug manufacturers.”
“I personally think it’s rich, pun intended, that these multi-billion-dollar companies attempted to characterize the real-world crises facing our State’s health care system as ‘imagined harm,’” Neronha said in a statement. “With escalating drug prices, savings from the 340B program provide crucial support for safety-net facilities across Rhode Island, without which we would be much worse off.”
“All Rhode Islanders deserve quality, affordable, and comprehensive healthcare, and successfully maintaining this program is a step in the right direction,” he added.
Novartis, the plaintiff in the lawsuit, has appealed the case to the U.S. Court of Appeals for the First Circuit in Boston.
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