340B Drug Pricing Program Litigation Update

In November of last year, we wrote about a preliminary injunction being sought by hospital advocacy groups attempting to stop implementation of the Trump administration’s cuts to the 340B Drug Pricing Program (“340B Program”). Last week, the Motion for a Preliminary Injunction was denied and the case was dismissed in a final, appealable order. As a result, the final rule effecting such cuts – “Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs” (“Final Rule”), promulgated by the Centers for Medicare & Medicaid Services (CMS) on November 13, 2017 – went into effect on January 1, 2018.

As we previously described, the Final Rule cut reimbursement rates for participating hospitals purchasing medicine through the 340B Program from 6% above the average sales price to 22.5% below the average sales price. In a statement following the decision, the hospital advocacy groups indicated that they will continue to pursue legal actions to fight cuts to the 340B Program.[1]

[1] Hospital Groups to Continue to Pursue Lawsuit to Reverse Cuts for 340B Hospitals, Association of American Medical Colleges, December 29, 2017.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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