As part of an overall effort to lower the price of prescription drugs, the Trump administration instated a policy that reduced payments to hospitals under the 340B Drug Pricing Program, which went into effect on January 1, 2018. The reimbursement reductions were supposed to make drugs cheaper for some patients on Medicare, but hospital groups fought the policy in court. Recently, a district court judge ruled that the change was in violation of the law.
The 340B Drug Pricing Program offers discounted drugs to hospitals and health centers that serve vulnerable and uninsured patients; the U.S. Department of Health and Human Services (HHS) then reimburses hospitals for the discounted drugs at a much higher rate, and hospitals pocket the difference. While the additional funds are meant to be reinvested in services for disadvantaged patients, critics argue that hospitals were not using the money appropriately.
“The court’s carefully reasoned decision will allow hospitals and health systems in the 340B Drug Pricing Program to serve their vulnerable patients and communities without being hampered by deep cuts to the program,” the American Hospital Association said in a statement, according to STAT News.
HHS expressed disappointment in the decision and said it will provide more information to the court to determine next steps.
Source: STAT News, December 28, 2018.