In a swift reversal that underscores the high-stakes battle over drug pricing, HHS Ends 340B Drug Rebate pilot efforts following a legal challenge from the nation’s largest hospital association.
The U.S. Department of Health and Human Services confirmed in a filing Thursday in federal court in Maine that it is abandoning — at least for now — a proposed rebate model that would have reshaped how hospitals are reimbursed under the federal 340B drug discount program.
The move came as part of a joint motion with the American Hospital Association and a coalition of hospitals, who in turn agreed to drop their lawsuit contesting the plan.
A Legal Fight Comes to a Halt
The joint filing follows weeks of negotiations between the parties. Earlier, HHS had indicated it was prepared to withdraw its appeal of a First Circuit ruling that upheld a lower court’s temporary block on the rebate initiative.
In their motion, HHS and the AHA signaled that further litigation would likely be futile.
“Defendants do not believe the full administrative record would change the outcome of this litigation at summary judgment,” the parties stated. “As a result, the Parties agree that further motions practice would not be fruitful, and instead, it would serve the best interests of judicial economy and the Parties to vacate the challenged actions with a remand to the Health Resources and Services Administration.”
The filing effectively shelves the rebate pilot unveiled in July by the Health Resources and Services Administration, the HHS subagency overseeing the Section 340B Drug Pricing Program.
