DOJ backs AbbVie in bid to overturn a Colorado law on 340B| STAT

The Department of Justice is backing AbbVie in its battle to overturn a Colorado law that prohibits pharmaceutical companies from placing restrictions on a controversial federal drug discount program.

Created more than 30 years ago, the 340B Drug Pricing Program was designed to help hospitals and clinics care for low income and rural patients. To ensure the program achieves this goal, drug companies that want to take part in Medicare or Medicaid must offer their medicines at a discount — typically, 25% to 50%, but sometimes higher — to participating hospitals and clinics.

But six years ago, many drugmakers began limiting some discounts when hospitals or clinics bought medicines and then shipped them to contracted retail or specialty pharmacies for patients to pick up or for delivery, instead of using their own in-house pharmacies. The drug companies alleged that using contract pharmacies led to abuses, such as duplicate billings, product diversions, and ineligible rebates.