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Eli Lilly's controversial 340B drug discount policy is under fire again. Missouri's attorney general issued a cease-and-desist letter, and six Massachusetts hospitals filed a federal lawsuit, both calling the policy unlawful. The policy requires hospitals to submit claims-level data to receive statutory drug discounts — a move critics say burdens providers and endangers patient data.
Eli Lilly's requirement that 340B-covered hospitals submit claims-level data to qualify for statutory drug discounts is drawing fresh legal heat. Missouri Attorney General Catherine Hanaway issued a cease-and-desist letter this week, arguing the policy violates the state's consumer protection law and warning of potential injunctions and civil penalties. She stated the move is an abuse of market power that hits rural communities especially hard.
A day later, six major Massachusetts hospitals — including Mass General and Brigham and Women's — filed a federal lawsuit challenging the policy. The hospitals, which refused to comply and subsequently lost their 340B discounts, say non-compliance could cost them tens of millions annually. They also raised serious concerns about Lilly's required data platform, alleging it is a private-equity-owned platform that exposes hospitals to HIPAA-related privacy and cybersecurity risks while limiting Lilly's liability to just $100.
Key Takeaways:
Why it matters: The 340B program is a lifeline for safety-net hospitals serving vulnerable populations. As Lilly's policy spreads and legal challenges multiply, the outcome could reshape how pharmaceutical companies interact with the program — and what data hospitals must surrender to access federally mandated discounts.
