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Favorable Ruling on 340B Lawsuit

January 11, 2019

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PRESS CONTACTS
Ivy Baer, Senior Director and Regulatory Counsel

The D.C. District Court Dec. 27, 2018, ruled in favor of the AAMC, the American Hospital Association, and America's Essential Hospitals in a lawsuit against the Department of Health and Human Services that challenged the significant Medicare reductions in payments to 340B hospitals for certain outpatient drugs [see Washington Highlights, Sept. 7, 2018].

The judge issued a permanent injunction. He also noted the impact this decision will have on the Medicare system and asked both sides to submit briefs about the proposed remedy. The government has asked for a stay in the briefing during the government shutdown, which the AAMC and other associations have opposed. The judge has not yet ruled on that motion. It also is possible that the government will appeal the decision overturning the rule.

In a joint statement, the associations noted their strong support for the ruling, stating, “The court’s carefully reasoned decision will allow hospitals and health systems in the 340B Drug Pricing Program to serve their vulnerable patients and communities without being hampered by deep cuts to the program.”

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