Johnson & Johnson's Drug Discount Plan Gets Thrown Out In Court

A federal court has sided with the U.S. Department of Health and Human Services (HHS), rejecting Johnson & Johnson’s (NYSE:JNJ) effort to reshape its participation in the 340B Drug Pricing Program.

The ruling comes after months of legal back-and-forth following Johnson & Johnson's proposal to shift from upfront drug discounts to a rebate model—an approach the agency never formally approved.

The dispute centers on the 340B Program, a federal initiative requiring pharmaceutical manufacturers that participate in Medicaid and Medicare Part B to sell outpatient drugs at reduced prices to certain healthcare providers, including hospitals and clinics that serve low-income and rural populations.

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Johnson & Johnson, a long-time participant in the program, initiated litigation in November 2024 after the Health Resources and ...