Missouri Challenges Lilly’s 340B Data Policy: What Stakeholders Should Know

On October 26, Missouri Attorney General Catherine Hanaway sent Eli Lilly a cease-and-desist letter challenging the company’s expanded claims-data submission policy. The letter directs Lilly to stop conditioning 340B pricing for Missouri covered entities on the submission of in-house pharmacy claims data and to stop using any such data already collected. It requests confirmation from Lilly within 30 days that the company has stopped applying the policy in Missouri and using the data, and warns of potential enforcement under the Missouri Merchandising Practices Act (MMPA).¹

For 340B covered entities, pharmacies, and other stakeholders, Missouri’s action deserves some attention. The letter targets only in-house dispensing data, but its implications could reach the purchasing, data, and contractual relationships supporting 340B pharmacy services.

READ MORE: Pharmacies Face Persistent MFP Cash Crunch Amid PBM, 340B Shifts

What Missouri Alleges

According to the letter, Lilly denied University of Missouri Health Care (MUHC) access to 340B pricing on Lilly products beginning July 2 after MUHC declined to provide the requested data. To avoid continued harm to MUHC and its patients, the university subsequently agreed to supply data temporarily while reserving its rights.²

The letter argues that Lilly’s representations about making 340B prices available conflict with its denial of those prices to entities that reject the data condition. Missouri alleges that conduct is misleading and unfair under state consumer-protection law.¹

Those are the state’s allegations. A cease-and-desist letter is not a judicial determination that Lilly’s policy is unlawful, and nothing in the letter suggests that discounted purchasing has been restored. Still, the letter shows that Missouri is now treating manufacturer 340B conditions as a consumer-protection matter rather than solely a question of federal program administration.

How Lilly’s Policy Works

Lilly’s January 15 notice expanded its claims-level data requirements, which had applied to contract pharmacy dispensing since December 2021 and all 340B dispensing, including in-house pharmacy dispensing, effective February 1. It requires covered entities to submit pharmacy and medical claims data for Lilly’s entire portfolio through 340B ESP, generally within 45 days, with 60 days allowed for specified products. According to the policy, failure to submit timely, complete, and accurate information may result in loss of access to 340B pricing until the data is provided.³

Importantly, Lilly frames its pricing commitment as expressly conditional: It says it will continue to offer 340B medicines at or below the ceiling price “as long as the covered entity provides the minimal, standard business information outlined in this notice.” Lilly also states that it will use the data to monitor for and avoid duplicate discounts and to ensure the eligibility of certain replenishment orders.

Lilly has publicly defended these types of requirements as a means of detecting duplicate discounts and other program-integrity problems. In its January response to the American Hospital Association (AHA), the company argued that the information is routinely maintained and that collecting it is lawful and imposes no new burden.⁴

Hospitals see it differently. The AHA’s April request for federal intervention described substantial compliance costs and operational uncertainty, and Missouri’s letter likewise stresses the “heavy costs and burdens” MUHC bears.⁵ Unlike contract pharmacy replenishment data, in-house dispensing data may not already be compiled in the format Lilly requires, and medical-benefit claims for administered drugs raise their own data-mapping challenges. The burden therefore remains a contested issue.

The Legal Question Is More Specific Than Transparency

The 340B program requires participating manufacturers to offer eligible covered entities outpatient drugs at or below statutory ceiling prices. The Health Resources & Services Administration (HRSA) describes the program as helping eligible providers stretch resources and serve more patients.⁶

Program integrity is also essential. Federal law prohibits duplicate discounts, meaning 340B pricing and a Medicaid rebate on the same drug. Diversion to ineligible patients is also prohibited. HRSA requires covered entities to maintain mechanisms to prevent them.⁷ Lilly’s position is that claims-level data helps detect violations that the existing framework fails to catch.

So the real question is not whether transparency is desirable; it is whether Lilly may condition statutory pricing on this particular data submission and whether doing so violates state law. The MMPA broadly prohibits deceptive and unfair practices in connection with sales or advertising. The statute separately authorizes the attorney general to seek court-ordered relief, including injunctions.^8,9

Missouri’s theory faces several hurdles. First, Lilly will likely argue that the 340B statute and its pharmaceutical pricing agreement occupy the field and that disputes over manufacturer compliance belong in HRSA’s enforcement processes, not in state consumer-protection actions. Courts have grappled with similar preemption arguments in challenges to state 340B contract pharmacy laws. Moreover, the MMPA’s application to sophisticated institutional purchasers buying under a federal pricing program, rather than ordinary consumers, is likely to be contested.

Relevant federal precedent requires careful reading. In Novartis Pharmaceuticals Corp. v. Johnson, the DC Circuit held that the 340B statute does not categorically bar manufacturers from imposing conditions on distribution to contract pharmacies, and it upheld policies that included a claims-data requirement. But the court left open challenges involving more onerous conditions or particular circumstances in which an entity could not supply the information.¹⁰ This prior case gives some context but does not determine the outcome of Missouri’s challenge to Lilly’s policy.

Keeping Access and Accountability Together

Missouri’s action tests whether state consumer-protection law can meaningfully check manufacturer conditions on 340B purchasing. The next developments to watch are Lilly’s response, any negotiated changes, whether and how the attorney general chooses to pursue this, and whether other states adopt similar theories. Reasonable compliance measures should support program integrity while preserving access for eligible providers and the patients they serve.

READ MORE: Law and Regulations Resource Center

REFERENCES

1. Hanaway CL, Capozzi LJ III, Gilberg BS. Unlawful claims data submission policy. Attorney General Office of Missouri. October 26, 2026. Accessed November 6, 2026. https://ago.mo.gov/wp-content/uploads/CD-Letter-Re.-Eli-Lillys-Claims-Data-Submission-Policy.pdf

2. Attorney General Hanaway orders Eli Lilly to halt unlawful prescription pricing conditions. Attorney General Office of Missouri. News Release. October 26, 2026. Accessed November 6, 2026. https://ago.mo.gov/attorney-general-hanaway-orders-eli-lilly-to-halt-unlawful-prescription-pricing-conditions/

3. Update to Lilly’s 340B distribution program for in-house pharmacies. STAT News. January 15, 2026. Accessed November 6, 2026. https://www.statnews.com/wp-content/uploads/2026/06/Lilly-Notice-to-340B-Covered-Entities-Effective-2-1-26-2.pdf

4. Lilly’s in-house claims data program. Eli Lilly. January 27, 2026. Accessed November 6, 2026. https://delivery-p137454-e1438138.adobeaemcloud.com/adobe/assets/urn:aaid:aem:9a57cfca-5ff7-4024-a87d-8eadd6de9868/original/as/340B_Letter_to_HRSA_Re_Claims_Data_(Final).pdf

5. AHA urges HRSA to act as Eli Lilly threatens 340B discounts over claims data submission policy. AHA News. April 27, 2026. Accessed November 6, 2026. https://www.aha.org/news/headline/2026-04-27-aha-urges-hrsa-act-eli-lilly-threatens-340b-discounts-over-claims-data-submission-policy

6. 340B drug pricing program. Health Resources & Services Administration. October 2026. Accessed November 6, 2026. https://www.hrsa.gov/opa

7. Duplicate discount prohibition. Health Resources & Services Administration. July 2020. Accessed November 6, 2026. https://www.hrsa.gov/opa/program-requirements/medicaid-exclusion

8. 407.020. unlawful practices, penalty — exceptions. Missouri Legislature. August 28, 2020. Accessed November 6, 2026. https://revisor.mo.gov/main/OneSection.aspx?section=407.020

9. 407.100. injunction — temporary restraining orders — receivers — restitution, when — civil penalty — venue — restitution funds payable to injured parties but interest payable to general revenue. Missouri Legislature. August 28, 1994. Accessed November 6, 2026. https://revisor.mo.gov/main/OneSection.aspx?section=407.100&bid=23016

10. Novartis Pharmaceuticals Corporation v. Johnson (D.C. Cir. 2024). Justia. May 21, 2024. Accessed November 6, 2026. https://law.justia.com/cases/federal/appellate-courts/cadc/21-5299/21-5299-2024-05-21.html