HHS Reconsiders 340B Drug Pricing Program After Court Blocks Initial Plan
The Department of Health and Human Services (HHS) is actively exploring a redesign of its 340B rebate model pilot program following a series of legal challenges that effectively halted its initial implementation. The agency is now seeking feedback from stakeholders as it charts a new course for the program, which aims to lower drug costs for vulnerable populations.
On February 13, the Health Resources and Services Administration (HRSA) issued a request for information to gather input on a potential rebate-based model under the 340B Drug Pricing Program. Stakeholders have until March 19 to submit their comments.
The original pilot program, unveiled in August, proposed a significant shift for 340B hospitals: moving from upfront drug discounts to a system requiring them to pay full market prices and then seek reimbursement via rebates. This change sparked immediate opposition, with the American Hospital Association (AHA) and other plaintiffs filing a lawsuit arguing the new model would add hundreds of millions of dollars in costs and potentially compromise care in rural and underserved communities.
“We welcome HRSA’s attempt to gather detailed information about the impact of a rebate model,” said a representative from the American Hospital Association. “However, HHS should reconsider policies that shift costs to hospitals serving vulnerable communities.”
The legal battle unfolded swiftly. On December 29, the U.S. District Court for the District of Maine issued a preliminary injunction blocking the program. The 1st U.S. Circuit Court of Appeals subsequently denied the government’s request for a stay on January 7. Recognizing the legal hurdles, HHS filed a motion on February 5 stating that further litigation would not be “fruitful” and requesting the court to remand the issue back to HRSA for further consideration. The district court granted this request on February 10, vacating and remanding the program and related approvals to HHS.
Any future iteration of the rebate program will be subject to a rigorous process, including public notice, a formal comment period, and a delayed effective date of at least 90 days following the announcement of any manufacturer approvals. This careful approach signals a commitment to transparency and collaboration as HHS navigates the complexities of the 340B program and seeks a sustainable path forward.
