340B Rebate Pilot Program Remains Halted

The 340B Drug Pricing Program Rebate Pilot Program remains on hold amid legal challenges. The First Circuit Court of Appeals on Jan. 7 denied the Department of Health and Human Services' (HHS') request to allow the 340B Rebate Pilot Program to proceed while its appeal of the district court's preliminary injunction is pending. Prior to the decision, America's Essential Hospitals urged the court to deny HHS' request for a stay.

As a result of the First Circuit's Order, manufacturers must continue to offer all 340B drugs to covered entities with an upfront discount.

The First Circuit agreed with the lower court's finding that the federal government failed to consider the program's impact on 340B covered entities, which likely constitutes a violation of the Administrative Procedure Act. From there, the court further reasoned that the district court was justified in holding that the hospitals were likely to succeed on the merits of the case.

The court also concluded that leaving the injunction in place would not cause HHS any irreparable injury, in part because, as HHS itself has acknowledged, the pilot program is not the only method that can be used to prevent 340B and Maximum Fair Price duplicate discounts.

The First Circuit continues to consider HHS' appeal of the district court's preliminary injunction while implementation of the program remains halted.

Contact Director of Policy Rob Nelb, MPH, at [email protected] or 202.585.0127 with questions.