* The Chicago Tribune last week…

Gov. JB Pritzker signed a bill into law Friday that places guardrails on a drug discount program that hospitals and other healthcare providers say they rely on to help them care for vulnerable patients.

The new law prohibits drugmakers from restricting the number or types of pharmacies that hospitals and other providers can contract with to dispense medications to their patients through a federal program called the 340B Drug Pricing Program. It also bars drugmakers from placing certain other restrictions and requirements on providers and pharmacies participating in the program. […]

But drug manufacturers argue that the savings are not being passed along to patients, and that hospitals and others are instead profiting from the program.

“Large tax-exempt hospitals and their for-profit partners are exploiting the program, buying medicines at steep discounts and then marking them up by thousands of dollars,” Will May, a spokesperson for industry group the Pharmaceutical Research and Manufacturers of America, said in a statement.

* Courthouse News yesterday…

A group of pharmaceutical companies (AbbVie, Bristol Myers Squibb and Novartis) sued Illinois Attorney General Kwame Raoul to block a state law requiring the drug giants to send discounted drugs to any and all pharmacy providers. […]

“It is beyond dispute that commercial pharmacies and their third-party administrators are profiting from 340B-priced sales. And it is also beyond dispute that, without HB 2371, AbbVie would complete far fewer 340B priced sales. As a result, Illinois’ law forces AbbVie to provide more 340B priced drugs and the corresponding profits to hospitals, their commercial pharmacies and commercial third-party administrators than federal law requires,” Owen said in the 63-page complaint.

Novartis Pharmaceuticals made a nearly identical argument in its own complaint, asserting that HB 2371 cannot coexist with federal law. […]

Nearly two dozen other states have passed contract pharmacy laws akin to Illinois’s HB 2371, creating a patchwork of variable regulation the plaintiffs say make it impossible for the federal government to manage compliance with the 340B program.

* From AbbVie’s complaint…

AbbVie brings this lawsuit to halt an unconstitutional state power grab. Illinois enacted H.B. 2371 to compel AbbVie—an Illinois-headquartered biopharmaceutical company— to transfer its pharmaceutical products to commercial pharmacies at substantially discounted prices, on terms Congress never authorized, under pain of escalating civil penalties. In doing so, Illinois has run headlong into the Supremacy Clause. H.B. 2371 impermissibly rewrites the terms of a federal drug-pricing regime—the federal 340B Program—by imposing onerous State-law obligations that conflict with what Congress enacted and what the United States has said those obligations are. H.B. 2371 also effects an unconstitutional taking in violation of the Takings Clause of the Fifth Amendment, seizing AbbVie’s private property for the private benefit of commercial pharmacies without just compensation. […]

The 340B statute’s text is deliberate. Manufacturers are required only to “offer” their drugs to covered entities at the 340B price—not to “sell” them unconditionally. That distinction is not a technicality; it is the heart of this case. The statute requires manufacturers to make an offer at a particular price to a particular set of covered entities—and it preserves manufacturers’ liberty to insist upon other non-price terms.

Click here for Novartis’ complaint.

* Crain’s…

AbbVie argues that the [340B] program is being abused with covered entities that now include commercial pharmacies like Walgreens and CVS, which “are not covered entities.”

Illinois Attorney General Kwame Raoul’s office did not immediately respond to a request for comment.

AbbVie is seeking a declaration that HB 2371 is unlawful because it is pre-empted by federal law and unconstitutional under the supremacy clause; that the law represents an unconstitutional taking of AbbVie property; that 340B does not require drug manufacturers to unconditionally provide 340B pricing to covered entities or contract pharmacies; and that the federal statute “empowers drug manufacturers to require covered entities to provide claims data in exchange for 340B pricing.”