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News
Safety-net hospitals are back in court fighting the Trump administration's revamped 340B rebate pilot — for the second time. The American Hospital Association and allies argue that swapping upfront drug discounts for post-purchase rebates would saddle hospitals with unsustainable costs and threaten care for vulnerable patients. They're asking the court to halt the program before its January 1 start date.
The hospital industry is once again suing the federal government to block a controversial pilot program that would replace upfront 340B drug discounts with after-the-fact rebates. The American Hospital Association (AHA), the Maine Hospital Association, and four safety-net hospitals filed suit in U.S. District Court for the District of Maine, seeking to halt the program before its scheduled January 1 launch. This is the second such lawsuit — a prior version of the pilot was blocked by the same court last year after judges found the rollout was hasty and failed to properly incorporate public feedback.
HRSA went back to the drawing board, launching a more extensive comment process before unveiling a revised pilot covering 21 drugs and 10 manufacturers. But hospitals say the agency still got it wrong, arguing that the administrative burden far exceeds HRSA's projections and that the program would force safety-net providers to dip into already-thin cash reserves to pay for drugs upfront while waiting for rebates.
By the Numbers:
Why it matters: The 340B program is a financial lifeline for safety-net hospitals serving low-income and uninsured patients. If the rebate model takes effect, critics warn it could force hospital closures, reduce patient access to care, and divert resources away from vulnerable communities — all while hospitals are already squeezed by Medicaid cuts and rising operating costs.
