On October 14th , pharmaceutical manufacturers AbbVie, Bristol-Myers Squibb and Boehringer Ingelheim filed a motion to intervene in the lawsuit filed by the American Hospital Association, Maine Hospital Association, and four safety-net hospitals challenging HHS’ revised 340B rebate pilot program, which is set to begin on January 1, 2027. Under the 340B rebate model, 340B entities would be required to purchase certain drugs at the whole acquisition cost and get the discount later, after certain documentation is provided. Under the lawsuit, hospital groups argue that the model fails to account for the administrative burden and cash-flow challenges associated with requiring covered entities to purchase drugs at higher upfront prices.  

In a separate motion, the Pharmaceutical Research and Manufacturers of America (PhRMA), argued that the pharmaceutical industry’s interests are distinct from those of the federal government and warrant direct representation in the case. The drugmakers argue that HHS won’t be able to adequately demonstrate the financial impact that the pilot’s cancellation would have. The filings represent the latest chapter in the ongoing legal battle over the rebate model. For the second time, HHS is seeking to implement the program, and litigation has ensued. 

In addition to the legal challenge, there’s legislation being considered by Congress to prevent the rebate model from taking place. U.S. Senators Jerry Moran (R-KS), Tammy Baldwin (D-WI), Shelley Moore Capito (R-WV), Tim Kaine (D-VA), John Boozman (R-AR), and John Hickenlooper (D-CO) introduced the SUSTAIN Act, which would end any 340B rebate model program within one year of enactment and instead establish an independent third-party data clearinghouse. A summary on other provisions of that bill can be found here.

Topics: Prescription Drugs: 340B