Missouri – A dispute over prescription drug discounts in Missouri has escalated into a direct order from the state’s top law enforcement office, with Attorney General Catherine Hanaway telling pharmaceutical giant Eli Lilly and Company to drop conditions she says are unlawfully standing between hospitals and lower-cost medicines.
At the center of the fight is the federal 340B Drug Pricing Program, an important financial tool for hospitals serving vulnerable communities.
Hanaway says Lilly has effectively turned access to those discounts into a data-for-discounts exchange, forcing participating hospitals to hand over extensive claims information before they can receive federally required 340B prices.
Hanaway issued a cease-and-desist letter directing Lilly to immediately stop requiring Missouri 340B hospitals to submit the disputed claims information as a condition of receiving discounted pricing. The order also tells the company to stop using claims data that has already been collected through the policy.
“Big Pharma does not get to bully Missouri hospitals or hold prescription drug prices hostage,” Hanaway said.
“Eli Lilly is abusing its market power to impose higher prescription prices in Missouri. These tactics fall hardest on rural communities that depend on the 340B program to keep clinics open and ensure patients receive the care they need.”
The confrontation traces back to a policy change Lilly introduced this year. Under the new requirements, hospitals participating in 340B must provide detailed claims information for every dispensing of a Lilly product, regardless of where the medication was provided.
That requirement quickly had consequences for University of Missouri Health Care.
MU Health Care declined to provide the requested information, and Lilly responded by cutting the health system off from 340B pricing on July 2, 2026, according to the attorney general’s office.
Faced with continuing financial losses and concerns about the impact on patients, the health system eventually agreed to supply the data temporarily while reserving its legal rights.
Missouri officials argue that the arrangement leaves MU Health Care paying both financially and administratively. In addition to complying with the reporting requirements, the system has been forced to bear costs associated with a policy the attorney general contends conflicts with Missouri law and the purpose of the federal discount program.
Hanaway’s office also alleges that Lilly created a misleading situation by representing that qualifying entities could purchase medications at required 340B prices while withholding those prices from Missouri hospitals that would not provide the additional claims data.
The attorney general says that conduct, combined with Lilly’s position in the pharmaceutical market, improperly pressured healthcare providers into accepting conditions that should not determine eligibility for the discounts.
If Lilly does not comply with the cease-and-desist order, the state could pursue enforcement under the Missouri Merchandising Practices Act.
The stakes extend beyond one hospital system. Missouri’s rural hospitals depend heavily on 340B savings to support services that can be difficult to maintain in smaller communities, including emergency departments, oncology and cancer treatment, and access to medications for low-income or uninsured patients.
For those facilities, losing discounted drug pricing can create pressure far beyond the pharmacy counter. The savings can help support services that might otherwise become harder to sustain.
Hanaway said her office intends to continue challenging pharmaceutical practices it believes unlawfully increase prescription costs or threaten access to healthcare in Missouri.
Residents who believe they have been affected by unfair pharmaceutical practices can submit a complaint through the Missouri Attorney General’s Office at ago.mo.gov.
This is what Missouri AG wrote to the company (letter in full):
To Whom It May Concern:
We write concerning Lilly’s unlawful claims data submission requirements for 340B hospitals.
In January 2026, Lilly announced a new policy to require 340B covered entities to submit claims data for all dispensations of all Lilly drugs, regardless of setting.
In July 2026, Lilly cut off University of Missouri Health Care (“MUHC”) from 340B pricing for its products. To avoid ongoing harm and loss to MUHC and its patients, MUHC agreed to provide the demanded data while reserving its statutory right to 340B pricing without unreasonable and onerous conditions. MUHC now bears the heavy costs and burdens of complying with Lilly’s requirements.
Lilly’s claims data submission requirements violate Missouri consumer protection law.
The Missouri Merchandising Practices Act (“MMPA”), under Chapter 407, Revised Statutes of Missouri, makes unlawful:
“[T]he act, use or employment by any person of any deception, fraud, false pretense, false promise, misrepresentation, unfair practice or the concealment, suppression, or omission of any material fact in connection with the sale or advertisement of any merchandise in trade or commerce.” § 407.020, RSMo.
Every time Lilly confirms its participation in the 340B program, it represents to the market that covered entities can purchase Lilly products at the requisite 340B ceiling price, by discounting its average wholesale price.
Lilly has also represented to the federal government, through its PPA with the Secretary of Health and Human Services, that covered entities’ purchases of eligible products from Lilly would be discounted according to program rules.
The 340B statute requires drug companies to:
“[O]ffer each covered entity covered outpatient drugs for purchase at or below the applicable ceiling price if such drug is made available to any other purchaser at any price.”42 U.S.C. § 256b(a)(1).
Lilly has broken these promises.
Despite its representations, Lilly does not offer its products at the requisite 340B ceiling price to all covered entities. Instead, it has cut off those that do not comply with Lilly’s extra-legal data demands.
Lilly’s representations regarding the availability of discounted pricing for covered entities are false and misleading to Missouri’s consumers. And by denying MUHC 340B pricing, Lilly is abusing its market power to impose unfair commercial practices on covered entities in Missouri.
Missouri expects all commercial businesses to refrain from unfair, deceptive, or dishonest business practices in connection with the sale and advertisement of merchandise, and Eli Lilly is no exception.
Accordingly, you are hereby directed to cease and desist from conditioning 340B pricing for covered entities in Missouri on the submission of claims data from in-house pharmacies and to cease any use of this data.
Failing to do so may result in subsequent legal action under the MMPA, an injunction against you, imposition of civil penalties, and you being required to pay the Attorney General’s costs of litigation, including attorney’s fees.
We ask that you confirm Lilly’s cessation of its January 2026 claims data submission policy in the State of Missouri and Lilly’s use of the subject data within thirty days of the date of this letter.
