Following two defeats in federal court, the Centers for Medicare & Medicaid Services has ended its 2025 attempt to launch its 340B Rebate Model Pilot Program. The program, which would have introduced a new approach to the 340B prescription drug discount program under which a limited number of pharmaceutical companies would pay rebates to 340B-eligible entities after they purchase drugs instead of offering discounts for the purchase of those same drugs, as has been the practice since the 340B program’s launch in 1992.
Late last year a federal court ruled against the imminent introduction of the model, doing so largely on procedural grounds centered on inadequate notice of the program’s introduction and CMS’s failure to respond to concerns raised by interested parties during the rulemaking process. The court also rejected the agency’s request for a stay in the delay of the program. Last week CMS informed the court that it would discontinue efforts to appeal these rulings.
In its ruling, the court noted that if CMS chooses to attempt to introduce the program again it has agreed to do so in accordance with prescribed guidelines for proposed rulemaking and applications for program participants.
Community safety-net hospitals have a special stake in the 340B program and are wary of any changes that might jeopardize the program’s effectiveness and its value both to those hospitals and to their patients. 340B is a vital part of community safety-net hospitals’ overall approach to serving the low-income residents of the communities in which they are located, enabling those hospitals to provide prescription drugs to patients who otherwise could not afford them. The program also generates savings that community safety-net hospitals reinvest in services for the low-income, underinsured, and uninsured residents of their communities.
Learn more about the end of this 340B litigation from the Fierce Healthcare article “Following legal setbacks, HHS agrees to toss 340B Rebate Model Pilot Program” and from this federal court ruling.
