Supreme Court Rules in Favor of Hospitals in 340B Drug Pricing Program Case

Today, the Supreme Court ruled that the U.S. Department of Health and Human Services (HHS) does not have the discretion to change 340B Drug Pricing Program reimbursement rates without gathering data on what hospitals pay for outpatient drugs. ASHP has aggressively been advocating to safeguard the 340B program and address this issue since 2018.

The court said in a unanimous opinion that “absent a survey of hospitals’ acquisition costs, HHS may not vary the reimbursement rates only for 340B hospitals.” The court further stated, “HHS’s 2018 and 2019 reimbursement rates for 340B hospitals were therefore unlawful.”

Based on the ruling, HHS will have to conduct a full survey of actual acquisition costs before making changes to Medicare Part B reimbursement for 340B drugs. The decision remands the case back to the lower court, which will likely have to work through potential remedies for the unlawful cuts to Medicare Part B reimbursement for 340B drugs.

“Today’s Supreme Court decision is a victory for hospitals and patients who rely on the 340B program,” said Tom Kraus, ASHP vice president of government relations. “Unfortunately, the program remains at risk due to manufacturer attempts to undercut it. ASHP will continue to push back against all efforts to undermine 340B, including HHS moves to impose reimbursement cuts for 340B hospitals.”