Cases & Deals

Drug manufacturer challenges HHS administrative dispute resolution rule

Clients Drug manufacturer

Jones Day represents a drug manufacturer in litigation challenging a U.S. Department of Health and Human Services (HHS) rule providing for administrative resolution of disputes between drug manufacturers and certain “covered entities” eligible for discounted drug pricing under Section 340B of the Public Health Service Act. The manufacturer’s complaint contends that the rule is substantively unlawful because it allows agency employees, who have not been appointed through presidential nomination and Senate confirmation, to decide significant disputes, in violation of the Appointments Clause of Article II of the Constitution, and because those agency employees also exercise powers reserved to federal judges under Article III of the Constitution. The complaint also contends that HHS issued the rule in violation of the Administrative Procedure Act.