The American Hospital Association (AHA) and the Maine Hospital Association have jointly filed a federal lawsuit seeking to halt the Biden Administration’s proposed changes to the 340B drug pricing program, specifically the rollout of a new 340B rebate model. Four safety-net hospitals have joined the suit, warning that the program, if implemented, could impose “hundreds of millions” of dollars in additional annual costs on hospitals that already operate with narrow financial margins. Under the new model, hospitals would be required to pay the full purchase price upfront for outpatient drugs and then later apply for rebates, a significant shift from the current system in which hospitals receive discounted 340B pricing at the point of sale. The AHA argues that this change could jeopardize hospitals’ access to statutory discounts, “risking the loss of millions of dollars in savings” that the law entitles them to receive. The lawsuit contends that reducing or delaying these benefits would directly undermine the ability of safety-net hospitals to fulfill their core mission. According to the plaintiffs, the financial disruption could limit hospitals’ capacity to:
Provide care for uninsured and underinsured patients
Offer low-cost or discounted medications
Sustain vital service lines such as oncology.
In addition to the economic impact, the AHA emphasizes that the proposed model would create extensive new administrative burdens with no demonstrated benefit for patients. The organization also expressed frustration with the compressed implementation timeline, arguing that hospitals would be forced to overhaul complex operational systems with little time to prepare.
Read the AHA press release and more at Becker’s Hospital Review.