Richie Davis, Michael French Provide Insight for Law360 Article About Johnson & Johnson’s Proposed 340B Rebate Program

Quarles & Brady Health & Life Sciences attorneys Richie Davis and Michael French were quoted in a Law360 article about Johnson & Johnson’s proposed 340B rebate program, which some hospitals contend is illegal. Davis is a Milwaukee-based partner and French is an associate in the Chicago office.

The proposal would see Johnson & Johnson eliminate upfront discounts for two popular drugs, starting October 15. The disproportionate-share hospitals to whom this rule would be applied instead would pay commercial prices initially and then file for a rebate to receive the applicable 340B discounts. A key part of the debate about the proposal revolves around whether 340B discounts should be passed along directly to consumers or can be used in other ways by hospitals.

An excerpt:

But Richard Davis, a partner at Quarles & Brady LLP with extensive experience working with entities that participate in the program, said the 340B statute doesn't limit how hospitals may use the savings from drug discounts. Nor does it require hospitals to report what they do with it.

"Covered entities are — under the law — free to use their 340B savings to further their healthcare operations generally as they see fit," he said in an interview.

Drugmakers have had some success defending their limits on contract pharmacies. But those challenges centered on subregulatory guidance rather than the statutory language hospitals say prohibits J&J's plan, attorneys said.

"The same types of legal arguments that manufacturers have made for contract pharmacy policies would not be usable for any arguments about these rebate policies," said Michael French, an associate at Quarles & Brady.

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