AHF Sues Apexus Over Failed 340B Drug Price Negotiations

Apexus has an exclusive federal contract to negotiate drug discounts for nonprofit safety net providers so they can provide more services

AHF alleges their failure to do this is unlawful, costs millions of dollars, and harms the public health

LOS ANGELES–(BUSINESS WIRE)–AIDS Healthcare Foundation (AHF), the largest global AIDS organization, which cares for over 116,000 people in the United States, and is an essential safety-net provider for disenfranchised, high-risk HIV/AIDS populations, filed a federal lawsuit (Case No. 2:22-cv-08450), against Apexus, LLC asserting claims of Breach of Contract; Breach of the Implied Covenant of Good Faith and Fair Dealing; and Unlawful, Unfair, or Fraudulent Business Practices.

Apexus, which has an exclusive contract to manage the Prime Vendor Program (PVP) of the Health Resources and Services Administration’s (HRSA) 340B drug pricing program, is responsible for negotiating drug price discounts for AHF and other eligible non-profit health care facilities participating in the 340B drug discount program (known as “covered entities”).

In its lawsuit, AHF asserts that the failure and refusal of Apexus to perform its obligations under the contract fairly, in good faith, and without discrimination has cost AHF millions of dollars on lifesaving HIV/AIDS prescription drugs, harming AHF’s ability to deliver lifesaving care. All other 340B entities, such as hemophilia centers, charity hospitals, and community clinics are similarly harmed.

“AHF brought this civil action to recover the many millions of dollars lost due to Apexus’ failure to conduct timely and successful price negotiations on our behalf in violation of the exclusive contracts Apexus entered into with HRSA,” said David Gruen, AHF attorney. “They have one job, and they won’t do it. In a time of rising healthcare costs, and rural hospitals closing in record numbers, Apexus’ unlawful inaction is hurting nonprofits and the patients they serve.”

Background on the 340B Drug Price Program and Apexus’ Exclusive Contract

The 340B drug pricing program is a government administered, but privately funded program that requires drug manufacturers to sell outpatient drugs at a reduced price to eligible health organizations such as AHF on behalf of their patients. It is housed under HRSA and costs the government nothing—the discounted drug pricing comes directly from participating drug companies. Pharmaceutical manufacturers that wish to offer their products in the Medicaid program are required to offer 340B prices on drugs to covered entities as a condition of participating in the Medicaid program.

Apexus is a wholly owned subsidiary of Vizient, Inc., a healthcare advisory business with a contract portfolio representing more than $130 billion in annual purchasing volume, and $409.8 million in self-reported total provider and healthcare revenue in 2021. Apexus was awarded its current—and exclusive—five-year contract to be the sole 340B Prime Vendor in the Fall of 2019.

AIDS Healthcare Foundation (AHF), the largest global AIDS organization, currently provides medical care and/or services to over 1.6 million individuals in 45 countries worldwide in the US, Africa, Latin America/Caribbean, the Asia/Pacific Region and Eastern Europe. To learn more about AHF, please visit our website: www.aidshealth.org, find us on Facebook: www.facebook.com/aidshealth, follow us @aidshealthcare or subscribe to our AHF podcast “AHFter Hours.”

Contacts

Tom Myers, General Counsel & Chief of Public Affairs for AHF +1.323.860.5259 [email protected]
Ged Kenslea, Senior Director, Communications, AHF +1.323.791.5526 [cell] +.323.308.1833 [work] [email protected]
David Gruen, Assistant General Counsel for AHF +1.323.860.5214 [email protected]