- The U.S. Court of Appeals for the D.C. Circuit has denied the American Hospital Association's lawsuit against HHS for $1.6 billion in cuts made to the 340B drug pricing program beginning this year. The lawsuit had previously been denied because the cuts hadn't yet taken effect.
- In the ruling, Circuit Judge Gregory Katsas writes that AHA failed to present a reimbursement claim to HHS Secretary Alex Azar before filing its lawsuit, a requirement AHA argued was fulfilled by submitting comment during the rulemaking process.
- AHA, the Association of American Medical Colleges and America’s Essential Hospitals said in a joint statement that they plan to "refile promptly in district court," but after this ruling, they will first have to properly meet the requirements laid out by the court.
The decision is definitely a setback for the hospital industry, which has been fighting tooth-and-nail to prevent cuts to the much-contested 340B program, which requires drugmakers to provide outpatient drugs to certain providers at a reduced cost. AHA, AEH, AAMC and three hospitals originally filed the lawsuit in November after the CMS’ final rule that lowered payments for 340B.
The groups argue the cuts will hurt hospitals' ability to provide community care and argue that the reimbursement change exceeds HHS authority.
U.S. District Judge Rudolph Contreras dismissed the lawsuit late last year, saying changes to the federal drug discount program had not taken effect before the suit was filed. Contreras said his decision was based upon the “plaintiffs’ failure to present any concrete claim for reimbursement to the (HHS) secretary for a final decision.” Contreras also refused to comment on the merits of the case.
Katsas did the same in this ruling, saying the three-judge panel that presided over the appeal has "no authority to consider the merits" of the case due to a lack of subject-matter jurisdiction.
In their joint statement, the hospital associations said they are "deeply disappointed that the courts have once again failed to rule on the merits of our case," but plan to refile. In order to do so, they will first have to properly present a reimbursement claim to HHS.