Federal Appeals Court Rejects Unilateral Manufacturer-Imposed Rebate Models

On July 21, a three-judge panel for the U.S. District of Columbia Court of Appeals unanimously affirmed two lower court decisions that found the 340B Drug Pricing Program statute requires the U.S. Health and Human Services (HHS) Secretary to approve any rebate model before a manufacturer can impose one. The court also affirmed the lower court's conclusion that 340B statute permits rebate models approved by the secretary.

America's Essential Hospitals filed amicus briefs in the initial cases, defending the Health Resources and Services Administration's stance that prior approval must be sought prior to model implementation. Federal courts blocked the secretary-designed rebate model slated to take effect Jan. 1, citing procedural issues.

HHS is now moving forward with a revised rebate model and released model details on July 31. In a statement, America's Essential Hospitals urged "the administration to rethink its approach."

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