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In a victory for the pharmaceutical industry, a federal judge temporarily blocked the federal government from imposing a hotly contested rule for handling disputes over a program that provides discounted drugs to hospitals and clinics serving mostly low-income populations.

The ruling granted a preliminary injunction sought by Eli Lilly (LLY), which filed a lawsuit arguing the Department of Health and Human Services improperly implemented a rule in attempting to settle a clash between several drug makers and hospitals.


At issue is the 340B drug discount program, which requires drug makers to offer discounts that are typically estimated to be 25% to 50% — but could be much higher — on all outpatient drugs to hospitals and clinics that serve low-income populations. There are approximately 12,400 so-called covered entities, including 2,500 hospitals, participating in the program.

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