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Federal Judge Dismisses 340B Drug Program Lawsuit


January 02, 2018

A federal judge recently dismissed charges from a coalition of hospital groups against the Department of Health and Human Services (HHS) which aimed to block changes in the amount hospital will be reimbursed under the 340B drug discount program.

In November, CMS revealed plans to drastically cut the 340B drug discount program. The new policy would cut Medicare payments from 6% above the average sale price to 22.5% less than the sale price. The program is used by hospitals to generate revenue to fund community programs and reinforce other underfunded programs.

The American Hospital Association (AHA), the Federation of American Hospitals, and the Association of American Medical Colleges were informed today by US District Judge Rudolph Contreras that their case had been dismissed. The judge ruled that the group of hospital advocates did not follow proper mitigation channels before filing the federal lawsuit—as required by law.

As a result of the case’s dismissal, the cuts will began to take effect on January 1, 2018. According to a press release, the ruling gives the hospital groups the opportunity to refile the lawsuit after the cuts take effect.

In a statement, the three hospital groups vowed to continue the fight against the HHS’ cuts to the 340B drug discount program and refile the lawsuit.

“For 25 years, the 340B Drug Savings Program has played a vital role in helping hospitals stretch scarce federal resources to expand and enhance patient services and access to care without any cost to the government,” Rick Pollack, president and CEO of the AHA, said in a press release. “Making cuts to the program, like those CMS has put forward, will dramatically threaten access to health care for many communities with vulnerable patients. We are disappointed in this decision from the court and will continue our efforts in the Courts and the Congress to reverse these significant cuts to the 340B program.”

David Costill


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