Hospitals Sue Trump Administration Again Over 340B Rebate Pilot — SkimNews
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- American Hospital Association filed its second lawsuit against the Trump administration to halt its 340B rebate pilot, which would convert upfront drug discounts into after-the-fact rebates for select Medicare drugs.
- In the first lawsuit in 2025, a judge temporarily halted a more limited version of the plan; the Department of Health and Human Services then voluntarily withdrew it after losing on appeal.
- In February, HHS announced an expanded version of the rebate model targeting 25 of the costliest, most widely used drugs under Medicare, up from 10 in the original plan, with an effective date of January 1, 2027.
- AHA's central argument mirrors the first case: the government failed to accurately account for the costs hospitals would incur by paying market prices upfront and then applying for rebates.
- The Health Resources and Services Administration received more than 2,400 comments on the second iteration, with hospitals describing in "granular detail the catastrophic impact" the plan would have.
Why it matters: The administration is expanding its 340B rebate experiment from 10 to 25 high-cost Medicare drugs despite already losing in court once, and hospitals say the government still hasn't accurately costed the cash-flow strain of paying full price upfront for expensive drugs and waiting on uncertain rebates.
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