Court Holds 2019 Reimbursement Cuts for 340B Drugs Unlawful; Remands to HHS for Remedy for 2018 and 2019

6 May 2019

On May 6, 2019, the U.S. District Court for the District of Columbia ruled that CMS acted outside its statutory authority in adopting an almost 30% reimbursement cut for Medicare Part B 340B drugs for 2019. This decision mirrors the court’s earlier decision striking down an identical cut for 2018. The ruling represents another substantial victory for the 340B covered entity community.

While the court held that both the reimbursement cuts were unlawful, it did not decide on an appropriate remedy for hospitals subject to the cuts in 2018 and 2019. Rather, the court remanded the issue to HHS to give it “the first crack at crafting a remedial measure.” The court encouraged HHS to act quickly and ordered the parties to submit a report by August 5 to keep the court apprised of HHS’ progress.

We will continue to monitor future developments related to this litigation.

Category: Drug Pricing

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