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September 19, 2018

Hospital Groups File Litigation Against HHS for Delay in Rulemaking

Several hospital groups recently sued the U.S. Department of Health and Human Services (HHS). This latest complaint asks the federal court to require HHS to issue rulemaking for 340B ceiling prices and accompanying penalties for manufacturers that fail to comply within 30 days of ruling. The plaintiffs in the lawsuit “collectively represent virtually every 340B hospital in the country” according to the filing. In their complaint, they opine that many of their members have been overcharged by manufacturers due to a lack of transparency regarding 340B ceiling prices. As such, the covered entities can’t readily take advantage of the discounts they are afforded under 340B.

It’s worth noting that HHS has delayed implementation of a 2017 final rule that establishes the methodology for calculating 340B ceiling prices and applying civil monetary penalties on five distinct occasions. This lawsuit alleges the most recent June 5, 2018 delay violates the Administrative Procedure Act which governs the federal agency rulemaking process.

This litigation is not surprising given the ongoing scrutiny the 340B program has been under in the larger push to curb drug prices and increase transparency. As detailed in a previous post, members of Congress have also urged the Health Resources and Services Administration (HRSA), a division of HHS, to issue regulations as part of their oversight of the 340B program.

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