NOVARTIS PHARMACEUTICALS CORPORATION v. JOHNSON

No. 21-5299, Consolidated with No. 21-5304.

NOVARTIS PHARMACEUTICALS CORPORATION, Appellee, v. CAROLE JOHNSON, IN HER OFFICIAL CAPACITY AS ADMINISTRATOR, HEALTH RESOURCES AND SERVICE ADMINISTRATION AND XAVIER BECERRA, IN HIS OFFICIAL CAPACITY AS SECRETARY, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Appellants.

United States Court of Appeals, District of Columbia Circuit.

Decided May 21, 2024.


Attorney(s) appearing for the Case

Daniel J. Aguilar , Attorney, U.S. Department of Justice, argued the cause for appellants. With him on the briefs were Brian M. Boynton , Principal Deputy Assistant Attorney General, Sarah E. Harrington , Deputy Assistant Attorney General, and Alisa B. Klein , Attorney.

William B. Schultz and Margaret M. Dotzel were on the brief for amici curiae American Hospital Association, et al. in support of appellants.

William Tong, Attorney General, Office of the Attorney General for the State of Connecticut, Clare Kindall, Solicitor General at the time the brief was filed, Leslie Rutledge, Attorney General, Office of the Attorney General for the State of Arkansas, Philip J. Weiser, Attorney General, Office of the Attorney General for the State of Colorado, Kathleen Jennings, Attorney General, Office of the Attorney General for the State of Delaware, Karl A. Racine, Attorney General, Office of the Attorney General for the District of Columbia, Holly T. Shikada, Attorney General, Office of the Attorney General for the State of Hawaii, Kwame Raoul, Attorney General, Office of the Attorney General for the State of Illinois, Derek Schmidt, Attorney General, Office of the Attorney General for the State of Kansas, Jeff Landry, Attorney General, Office of the Attorney General for the State of Louisiana, Aaron M. Frey, Attorney General, Office of the Attorney General for the State of Maine, Brian E. Frosh, Attorney General, Office of the Attorney General for the State of Maryland, Maura Healey, Attorney General, Office of the Attorney General for the Commonwealth of Massachusetts, Dana Nessel, Attorney General, Office of the Attorney General for the State of Michigan, Keith Ellison, Attorney General, Office of the Attorney General for the State of Minnesota, Lynn Fitch, Attorney General, Office of the Attorney General for the State of Mississippi, Douglas J. Peterson, Attorney General, Office of the Attorney General for the State of Nebraska, Aaron D. Ford, Attorney General, Office of the Attorney General for the State of Nevada, Matthew J. Platkin, Attorney General, Office of the Attorney General for the State of New Jersey, Hector Balderas, Attorney General, Office of the Attorney General for the State of New Mexico, Joshua H. Stein, Attorney General, Office of the Attorney General for the State of North Carolina, Ellen F. Rosenblum, Attorney General, Office of the Attorney General for the State of Oregon, Josh Shapiro, Attorney General, Office of the Attorney General for the Commonwealth of Pennsylvania, Peter F. Neronha, Attorney General, Office of the Attorney General for the State of Rhode Island, Sean D. Reyes, Attorney General, Office of the Attorney General for the State of Utah, Thomas J. Donovan, Jr., Attorney General at the time the brief was filed, Office of the Attorney General for the State of Vermont, were on the brief for amici curiae States of Connecticut, et al. in support of appellants.

Robert L. Marconi , Assistant Attorney General, Office of the Attorney General for the State of Connecticut entered an appearance.

Matthew Sidney Freedus and Ronald S. Connelly were on the brief for amici curiae National Association of Community Health Centers and Ryan White Clinics for 340B Access in support of appellants.

Catherine E. Stetson argued the cause for appellee Novartis Pharmaceuticals Corporation. With her on the brief were Susan M. Cook , Danielle Desaulniers Stempel , and Dana A. Raphael .

Philip J. Perry argued the cause for appellee United Therapeutics Corporation. With him on the brief were Andrew D. Prins , Gregory B. in den Berken , and Joseph E. Begun.

William J. Trunk was on the brief for amicus curiae Pharmaceutical Research and Manufacturers of America in support of appellees.

Paul J. Zidlicky and Eric D. McArthur were on the brief for amicus curiae Kalderos, Inc. in support of appellees.

William A. Sarraille was on the brief for amicus curiae Johnson & Johnson Health Care Systems, Inc in support of appellee United Therapeutics Corporation.

Opinion for the Court by Circuit Judge KATSAS.


Section 340B of the Public Health Service Act requires drug manufacturers to sell certain drugs at discounted prices to select healthcare providers. To facilitate the distribution of these drugs, the providers often contract with outside pharmacies. According to drug manufacturers, these partnerships have left the section...

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