According to Zhichun Finance APP, Eli Lilly and Co (LLY.US) has sued the USA's Health Resources and Services Administration (HRSA), accusing it of trying to unjustly prevent Eli Lilly from applying a specific discount model for pharmaceutical products provided under the government's 340B program. Previously, competitor Johnson & Johnson (JNJ.US) also filed a lawsuit for similar reasons. In the lawsuit filed on Thursday in the federal court in Washington D.C., Eli Lilly accuses HRSA of lacking reasonable grounds or procedures to block its cash supplement model for 340B covered entities.

Pharmaceutical companies participating in the 340B program must provide discounts on expensive outpatient drugs offered to healthcare providers serving uninsured and low-income patients.

Eli Lilly's cash supplement model involves paying cash directly to healthcare providers weekly, aiming to prevent abuses within the current program and ensure compliance with existing laws and the new requirements of the Inflation Reduction Act.

Eli Lilly emphasizes that the reason for this lawsuit is because HRSA has no authority to arbitrarily reject this model that aligns with the original intent of the 340B program, improving transparency, efficiency, and program integrity.

Earlier this week, Johnson & Johnson also filed a lawsuit, accusing the USA's Department of Health and Human Services (HHS) of rejecting its request to adjust its discount methods for the drugs Xarelto and Stelara under the 340B program.