Missouri attorney general tells Eli Lilly to stop tying 340B discounts to hospital claims data

The Missouri State Capitol in Jefferson City seen above the Missouri River. — Source: ABC News

Summary

Missouri's attorney general sent Eli Lilly a cease-and-desist letter on October 26 over claims-data conditions for 340B drug discounts.
The state says MU Health Care lost 340B pricing in July, then supplied the data temporarily while reserving its rights.
Lilly says its data policy helps identify abuse and duplicate discounts; the Missouri allegations have not been adjudicated.
The letter asks Lilly to confirm within 30 days that it has ceased the policy and use of the affected data in Missouri.

A state demand to the drugmaker

Missouri Attorney General Catherine Hanaway told Eli Lilly on Monday, October 26, to stop making hospitals' access to federal 340B drug discounts conditional on submitting detailed pharmacy claims data. In a two-page cease-and-desist letter, her office alleged that Lilly's January policy violates the Missouri Merchandising Practices Act and directed the company to stop applying the condition to covered entities in the state and stop using data collected under it. The letter is an assertion by the state, not a court finding against Lilly.^{[1] [2] [3]}

Hanaway's letter asks Lilly to confirm within 30 days that it has ended the claims-data requirement in Missouri. It warns that failure to comply could bring a state enforcement action, an injunction, civil penalties and litigation costs. KCTV reported that it sought comment from Lilly and had not received a response at publication; the company has separately defended the national policy in a January statement.^{[1] [3] [4]}

How MU Health Care became part of the dispute

The state says Lilly required 340B hospitals to submit claims records for dispensations of its products in all settings. According to the letter, University of Missouri Health Care lost discounted pricing for Lilly products in July after refusing the condition. The health system then provided the requested data temporarily to limit financial harm while reserving what it says is its right to the discounts. First Alert 4 and KCTV separately reported the attorney general's account of that sequence; neither report establishes a specific dollar loss.^{[1] [3] [5]}

Lilly's January response to hospital groups presents a different view. The company says collecting claims data from all pharmacy purchases helps detect fraud, abuse and unlawful duplicate discounts under 340B. Lilly contends the information is readily available and that the request imposes no new burden. Those are the company's positions, while Missouri says the condition improperly withholds prices that eligible hospitals should receive. No court resolution of this October letter was identified in the reviewed sources.^{[1] [4]}

The program and what comes next

The federal Health Resources and Services Administration says the 340B program requires drug manufacturers participating in Medicaid to offer significantly reduced outpatient-drug prices to eligible safety-net providers. Its list of covered entities includes certain public hospitals, children's hospitals and health centers. The program is intended to help those providers stretch limited resources and serve more eligible patients. Missouri's dispute concerns whether Lilly may demand the additional claims data as a condition for those prices, not whether MU Health Care is a covered entity.^{[1] [6]}

The disagreement predates this week's demand. In June, 340B Health, an association representing participating hospitals, urged federal regulators to intervene after Lilly cut off discounted pricing to select hospitals that had not supplied the data. Its legal characterization is an advocacy position. Missouri's next stated step depends on Lilly's response to the 30-day request; the letter threatens enforcement but does not itself announce a newly filed lawsuit or a settlement.^{[1] [7]}

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