Prominent drugmaker AbbVie Inc. has launched a first-of-its-kind legal challenge to the 340B program. On April 8, 2026, the company filed suit in the U.S. District Court for the District of Columbia, challenging the Health Resources and Services Administration’s (HRSA) longstanding interpretation of who qualifies as a “patient.” This marks the first time a drugmaker has mounted a direct federal legal challenge to the agency’s definition.
The Core Dispute
This lawsuit relates to a dispute between AbbVie and HRSA regarding the definition of “patient” as that term is used in the 340B statute. Through guidance dated October 24, 1996, HRSA defined the term “patient” broadly, requiring only that the individual receive healthcare services from a provider employed by or affiliated with the covered entity, that the covered entity maintain records of the individual’s healthcare, and that the services provided be consistent with those for which grant funding or federally-qualified health center look-alike status is provided. That guidance has never been updated.
In its complaint, AbbVie argues that HRSA “misinterpret[ed] the term ‘patient’ as the term is used in the 340B statute and its anti-diversion provision.” AbbVie proposes that the “best reading” of the term “patient” is one that requires: (1) a direct connection between the prescription and care provided by the covered entity; (2) a substantive (not perfunctory) medical encounter sufficient to meet clinical practice standards; (3) a qualifying encounter within the past 12 months; and (4) direct provider oversight of the condition for which the drug is prescribed. AbbVie claims that this definition aligns with the 340B statute’s anti-diversion provisions, which prohibit the sale or transfer of 340B-priced drugs to anyone who is not a patient of the entity.
What Prompted the Lawsuit
AbbVie identified what it alleged to be “atypical buying activity” by certain covered entities. For example, the complaint alleges that Barrio Comprehensive Family Health Care Center, Inc., a small San Antonio health center, saw 340B purchases of AbbVie Immunology Products (e.g., Humira, Skyrizi, and Rinvoq) increase by over 119% in a single year, with 71% of purchases dispensed through out-of-state pharmacies. The complaint alleges that prescribers at Barrio ranked among the top in the nation for prescribing Skyrizi and Humira, which AbbVie viewed as a statistical outlier for a single HRSA-funded health center in San Antonio. As a result, AbbVie developed concerns about potential diversion of 340B-priced drugs.
HRSA’s Response and Why AbbVie Sued
To audit a covered entity, drug manufacturers must submit audit workplans to HRSA for approval. To obtain approval, however, drug manufacturers must provide reasonable cause that the entity is engaged in duplicate-discounting or diversion.
Under this framework, AbbVie submitted audit workplans premised on its interpretation of the term “patient.” The parties disagree as to whether HRSA denied the workplans. What is clear from the complaint, however, is that HRSA: (a) rejected AbbVie’s definition of “patient” as inconsistent with Section 340B of the Public Health Service Act; and (b) clarified that it would not enforce corrective actions on any HRSA-funded health center based on a workplan using the company’s definition. AbbVie viewed this position by HRSA as effectively denying the workplan.
Invoking the Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo – which eliminated Chevron deference and requires courts to independently determine the best meaning of statutory terms – AbbVie asks the court to declare that its interpretation of “patient” is the “best reading” of the term as used in the 340B statute and authorize the planned audits.
The Stakes
A ruling in AbbVie’s favor would fundamentally redefine the term “patient” as used under the 340B statute by imposing a lookback window for qualifying encounters, potentially disqualifying referral-based and telehealth-only relationships, and requiring heightened oversight of the patient’s relevant condition. Providers could face stricter requirements around patient relationships, prescribing practices, and documentation, particularly for referral-based care and telehealth arrangements.
Even before a final ruling, this case signals increased scrutiny from manufacturers and underscores the importance of ensuring that current 340B compliance programs can withstand evolving interpretations. All 340B stakeholders, including covered entities, contract pharmacies, and third-party administrators, should closely evaluate how their current compliance programs would hold up under the competing definitions as this case moves forward.
How Frier Levitt Can Help
Frier Levitt advises covered entities, contract pharmacies, and other 340B stakeholders on compliance, audit preparedness, and program structuring. Our team closely monitors regulatory developments and litigation impacting the 340B program and works with clients to assess risk, strengthen documentation practices, and respond to manufacturer audits and enforcement actions. Contact Frier Levitt to evaluate your current program and ensure it remains aligned with both existing requirements and emerging legal standards.
