• District of Columbia: U.S. District Judge Dabney Friedrich last week upheld HHS' authority to oversee and regulate proposals to the 340B Drug Pricing Program in a case involving efforts from pharmaceutical companies to enact rebate-based discount models without government approval. Recently, several companies, including Eli Lilly, Bristol Myers Squibb, Novartis AG, and Sanofi, proposed moving away from upfront discounts through the 340B program to a post-sale rebate model. In the ruling, Friedrich found that the U.S. Health Resources and Services Administration did not act unlawfully by not approving the rebate-based pricing models. Friedrich declined to issue a declaration that rebate models are expressly prohibited under 340B law. Although drugmakers have expressed some disappointment in the ruling, hospital groups have praised the decision. "We are pleased this opinion recognizes the immense harm unilateral drugmaker rebate schemes would cause safety-net hospitals and the patients in need whom they serve," said Maureen Testoni, president and CEO of 340B Health. "Allowing these rebate schemes to proceed without government approval would have enabled drugmakers, not the government, to control how providers use 340B and upend the way it has operated for more than 30 years." (Murphy, Becker's Hospital Review, 5/19; Pifer, Healthcare Dive, 5/19)
• Maryland: FDA has approved three new color additives made from natural sources such as flowers and algae. The three new colors include two blue colors, one made from algae-based galdieria extract and the other from butterfly pea flower, and one white color called calcium phosphate. Recently, FDA has made efforts to move away from artificial food dyes. In January, the agency banned the use of Red Dye No. 3, which is used in dozens of candy, food, and beverage products. HHS Secretary Robert F. Kennedy Jr. has also spoken out against artificial food dyes, saying that they "offer no nutritional value and pose unnecessary risks." FDA and Kennedy have also asked the food industry to voluntarily phase out the use of petroleum-based artificial dyes before the end of 2026. According to Alireza Abbaspourrad, an associate professor of food chemistry and ingredient technology at Cornell University, the new approvals will give food manufacturers more options if they want to switch from artificial to natural dyes, but it could be difficult to make the change due to costs, natural colors fading more easily, and other potential problems. (Zimmerman, Food Dive, 5/13; Callahan/Blum, New York Times, 5/12)
• New Jersey: Novo Nordisk has agreed to partner with Septerna to develop GLP-1 obesity drugs. Through the deal, Septerna, which specializes in making small-molecule drugs, could receive around $2.2 billion from Novo, including over $200 million in upfront and near-term milestone payments. Septerna could also receive royalties on global sales of any approved products. According to the companies, they plan to start with four development programs for potential small-molecule treatments that targets G protein-couple receptors, including GLP-1, GIP, and glucagon hormone receptors. "Septerna has demonstrated strong capabilities in GPCR drug discovery, and we are excited about the opportunity to develop oral small molecule medicines directed at multiple targets," said Marcus Schindler, Novo's chief scientific officer. (Chen, STAT+ [subscription required], 5/14; Chopping, Wall Street Journal, 5/15)

Many health systems rely on the 340B program for their financial sustainability. But it’s long come under criticism, and now, proposed changes are on the table. Our experts discuss 340B’s evolution and the impact of potential reforms. Plus, get an update on the recent executive order on drug pricing.