A safety net health care provider is what you might assume it is:
It’s a health care entity — such as a community health center, public hospital or clinic — that provides essential services to low-income, uninsured or vulnerable populations, regardless of their ability to pay. They often are the providers of last resort in medically underserved areas.
This is the important role Sagebrush Health Services, a nonprofit, plays in Nevada to over 10,000 patients.
But late last year it also took on the role of plaintiff in a lawsuit against a Fortune 500 drug manufacturing company.
Sagebrush filed a lawsuit against Amgen Inc. in California state court, where the company is based. In its complaint, Sagebrush asks the court to order the return of millions of dollars that Amgen improperly took from Sagebrush, and to award treble (triple) damages under California law, as well as punitive damages to “punish Amgen and deter future similar conduct.”
According to the complaint, the issue began nearly two years ago when Amgen unilaterally determined that Sagebrush was not an eligible entity under the 340B Program. The lawsuit asserts that Amgen, a $184 billion company, disregarded the established federal process for challenging a covered entity’s eligibility and instead took unilateral action.
The lawsuit also cites a letter from Amgen’s attorneys to a U.S. Senate committee, in which they acknowledged that “the 340B program is not designed to permit even this modest level of manufacturer oversight” and that manufacturers “are not equipped or permitted to police compliance.”
Amgen sells the following drugs through the 340B Program to covered entities:
- Repatha® (evolocumab): high LDL cholesterol and cardiovascular risk reduction
- Enbrel® (etanercept): rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis, plaque psoriasis, juvenile idiopathic arthritis
- Otezla® (apremilast): psoriatic arthritis, plaque psoriasis, Behçet’s disease (oral ulcers)
Sagebrush believes the case has implications for the entire health care sector. It says the outcome will shape how drug manufacturers interact with other 340B covered entities going forward.
If Amgen succeeds in having a judge dismiss the case, it believes this would send a message that manufacturers face limited accountability for pricing conduct that affects safety-net providers. If Sagebrush’s claims proceed, it says this will establish a path for covered entities to seek redress when manufacturers do not honor their pricing obligations.
For the thousands of hospitals, clinics and health centers that depend on 340B and their patients, this case is vitally important.