Eli Lilly sues US over blocked drug discount plan

Eli Lilly is suing a federal health agency after it blocked the company’s plan to limit drug discounts for hospitals. The move follows similar legal action by Johnson & Johnson this week, signaling that drugmakers are unhappy with the current discount system.

The lawsuit, filed in Washington, D.C., argues that its proposal would make the 340B program, which gives discounted drugs to hospitals serving low-income patients, more transparent and efficient.

The drugmaker wants hospitals to pay the full drug price upfront and receive cash rebates instead of immediate discounts. It says this would help stop hospitals from misusing the concessions, particularly by billing Medicaid for drugs bought at 340B prices, which is illegal.

Lilly and J&J argue that the current system allows for unfair practices, while hospitals say the discounts are crucial for serving disadvantaged patients.