Hospitals Sue to Implement 340B Program Final Rule

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On September 11, 2018, hospital advocacy groups and three individual hospitals filed a complaint in the United States District Court for the District of Columbia alleging that the Department of Health and Human Services (HHS) violated the Administrative Procedures Act by unnecessarily delaying the effective date of final regulations related to the 340B Drug Pricing Program (340B Program).

The complaint is available here. The case is American Hosp. Ass’n v. Azar, D.D.C., No. 1:18-cv-02112. The final regulations at issue implement changes required pursuant to the Patient Protection and Affordable Care Act of 2010 (ACA) regarding the calculation of 340B drug prices and imposition of civil monetary penalties for noncompliance; though the underlying authority for the regulations was passed into law in 2010, initial proposed regulations were not released until 2015, with a final rule released on January 5, 2017 (the Final Rule). However, since the issuance of the Final Rule, HHS has delayed – five times – its implementation. The Arent Fox Health Care Counsel blog has covered the Final Rule and the subsequent delays here, here, and here.

The plaintiffs in the recently filed lawsuit allege that the “purported rationale[s]…the Department has offered have no support in the administrative record or otherwise” and that HHS’s delays to implement the Final Rule are “unreasonable, arbitrary and capricious, in violation of the Administrative Procedure Act.”

Arent Fox’s Pharmaceuticals, Prescription Drugs & Medical Devices team regularly advises clients on proposed rules affecting the pharmaceutical industry, as well as on compliance with existing rules, and will track the progression of this new lawsuit. If you have any questions or need assistance, please contact Stephanie Trunk or Erin Atkins in our Washington, DC office or the Arent Fox professional who regularly handles your matters.   

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