Eli Lilly moved to cut off 340B Drug Pricing Program discounts to hospitals that have refused to submit claims data under its January 2026 documentation policy.

The decision escalates a standoff with the American Hospital Association (AHA) and now has the association urging for federal intervention after Eli Lilly sent a letter on June 1, notifing an initial group of its covered entities of a five-business day window allowing them to submit the required claims data or risk losing access to 340B pricing.³

The company says it intends to extend the same enforcement to additional covered entities in the weeks ahead.

What is Lilly requiring and why?

In January 2026, Lilly expanded its long-standing claims data collection requirement to cover in-house pharmacy dispenses, in addition to contract pharmacy locations already subject to the policy.⁵ Under the requirement, covered entities are required to submit 14 fields for medical claims and 18 fields for in-house pharmacy claims, data Eli Lilly says is de-identified before submission and already routinely transmitted to Medicare, Medicaid, and commercial insurers.⁵

In a letter to Health Resources and Services Administration (HRSA) administrator Thomas Engels, Eli Lilly’s senior vice president and deputy general counsel Josh O'Harra argued the requirement is both legally sound and operationally modest, "The modest data that Lilly seeks is 'standard information' that decades-old HRSA guidance requires all pharmacies to maintain and routinely must be provided to insurers and other third parties," O'Harra wrote.

Eli Lilly says approximately 70% of covered entities purchasing its medicines, an estimated 2,350 entities, have already complied without issue, including 80% of community health centers, 85% of STD clinics, and two-thirds of critical-access hospitals.³ The company also says it has received nearly 800,000 in-house claims since January 1, 2026.

What has the AHA done in response?

AHA has been among the most vocal opponents of Lilly's policy, characterizing it’s decision as “unlawful” and harmful to patient care.² In a May 13 letter addressed to Eli Lilly Chairman and CEO David Ricks, AHA president and CEO Rick Pollack urged the company to abandon the claims data requirement and instead work toward a neutral third-party clearinghouse, a government-administered platform where data could be exchanged between covered entities and manufacturers while protecting patient privacy and limiting administrative burden.⁴

"There is a commonsense solution that addresses the concerns of all 340B stakeholders," Pollack wrote, proposing the clearinghouse as an alternative that would still provide the transparency both sides say they are committed to ensuring.

Eli Lilly never responded to the letter.

When the company announced it would proceed with enforcement on June 1, Pollack issued a statement pushing back on the company's characterization of its own conduct. "Make no mistake: Lilly did not, as it states, take this step 'reluctantly' or work 'tirelessly' to resolve 'legitimate concerns' about its unlawful policy," Pollack said.¹

What is Eli Lilly’s stance on the holdouts?

In its letter to HRSA, Lilly described the resistance as a coordinated boycott organized by the country's largest and most well-resourced disproportionate-share hospitals (DSH) through their trade associations.³ O'Harra wrote that ten covered entities, all major DSH hospitals, have submitted zero claims despite earning between $8 million and $16 million in 340B profits on Eli Lilly products since the requirement took effect.

In the June 1 letter, Eli Lilly also disclosed details of its outreach efforts prior to enforcement, claiming it sent two rounds of reminder letters, individually contacted the fifty largest holdouts in early May, and offered live discussions to address any concerns.³ Of those fifty entities, eleven did not respond at all.

According to Eli Lilly, two letters were sent using identical language, "down to the same closing sentence," declining to meet. Of the thirteen that did meet with Eli Lilly, twelve insisted on having outside counsel present and, according to Lilly, used the calls to demand clarifications while making no commitments.³

Lilly also disputed the central legal objection raised by holdouts that submitting de-identified claims data would violate HIPAA, noting that many of the same entities already transmit identical data through the same vendor for contract pharmacy replenishment orders. According to Eli Lilly, when asking whether entities would comply if their HIPAA concerns were resolved, outside counsel answered that they 'could not answer that question at this time.’³

What happens next?

In AHA’s most recent statement,Pollack called on the Department of Health and Human Services to intervene directly, saying HHS "can no longer sit on the sidelines" following months of inaction as Lilly's policy developed.¹

"This Administration has repeatedly shown that it is willing to be tough on drug companies to protect America's patients from profiteering and price gouging," Pollack said. "On behalf of the hospitals and health systems that serve America's rural and most underserved communities, we ask HHS to show that same toughness here."

At least six other drug companies have announced similar data policies requiring 340B hospitals to provide claims data in exchange for continued access to program pricing, suggesting the outcome of this dispute could have implications well beyond just Eli Lilly and the AHA.

The trajectory of 340B enforcement and manufacturer authority now awaits HHS’ response.

Sources

1. Eli Lilly moves to deny 340B pricing over data requirements; AHA urges federal action American Hospital Association June 2, 2026 https://www.aha.org/news/headline/2026-06-02-eli-lilly-moves-deny-340b-pricing-over-data-requirements-aha-urges-federal-action
2. AHA Statement on Eli Lilly Decision To Move Forward With Policy To Withhold 340B Discounts American Hospital Association June 1, 2026 https://www.aha.org/press-releases/2026-06-01-aha-statement-eli-lilly-decision-move-forward-policy-withhold-340b-discounts
3. RE: Lilly’s In-House Claims Data Requirement—Upcoming Action Eli Lilly and Company June 1, 2026 https://delivery-p137454-e1438138.adobeaemcloud.com/adobe/assets/urn:aaid:aem:21cf37f7-0576-41e2-83a4-a13add5fec43/original/as/Lilly_In-House_Claims_Data_Requirement-Upcoming_Action.pdf
4. AHA Urges Lilly to Drop 340B Claims-Data Policy, Proposes Neutral Clearinghouse American Hospital Association May 13, 2026 https://www.aha.org/lettercomment/2026-05-13-aha-urges-lilly-drop-340b-claims-data-policy-proposes-neutral-clearinghouse
5. Lilly Responds to American Hospital Association Letter to HRSA About 340B Program Changes Eli Lilly and Company January 29, 2026 https://investor.lilly.com/news-releases/news-release-details/lilly-responds-american-hospital-association-letter-hrsa-about