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340B Drug Pricing Program Litigation Update

In November of last year, we wrote about a preliminary injunction being sought by hospital advocacy groups attempting to stop implementation of the Trump administration’s cuts to the 340B Drug Pricing Program (“340B Program”). Last week, the Motion for a Preliminary Injunction was denied and the case was dismissed in a final, appealable order. As a result, the final rule effecting such cuts – “Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs” (“Final Rule”), promulgated by the Centers for Medicare & Medicaid Services (CMS) on November 13, 2017 – went into effect on January 1, 2018.

As we previously described, the Final Rule cut reimbursement rates for participating hospitals purchasing medicine through the 340B Program from 6% above the average sales price to 22.5% below the average sales price. In a statement following the decision, the hospital advocacy groups indicated that they will continue to pursue legal actions to fight cuts to the 340B Program.[1]


[1] Hospital Groups to Continue to Pursue Lawsuit to Reverse Cuts for 340B Hospitals, Association of American Medical Colleges, December 29, 2017, https://news.aamc.org/press-releases/article/hospital-groups-appeal-340b-ruling/.

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Kenneth Yood Healthcare Attorney SheppardMullin
Partner

Ken is a partner in the Corporate practice group in the firm's Los Angeles office. Chambers USAranks him highly for Healthcare, where he was commended for his "broad-based ability in the regulatory area." Clients appreciate that "his explanations are clear, and he understands the business side of things," notes Chambers 2016.

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Ken represents a wide range of healthcare providers and healthcare companies, including specialty and general acute hospitals (including local district, nonprofit and...

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Matthew Goldman, Corporate Attorney, Sheppard Mullin Law Firm
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Matthew Goldman is an associate in the Corporate Practice Group in the firm's Century City office and is a member of the firm's healthcare practice team.

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Matthew’s practice blends the regulatory and transactional components of healthcare law, and includes representation of hospitals, managed care organizations, medical groups, and other healthcare entities and providers. On the regulatory side, Matthew’s practice is focused on licensing, regulatory compliance, and managed care arrangements. Matthew has extensive experience preparing Knox-Keene HMO license applications and assisting clients with structuring shared-risk arrangements, developing and utilizing innovative payment methodologies, and ensuring compliance with applicable federal and state law. Matthew’s transactional practice is focused on mergers and acquisitions, joint ventures, and strategic alliances in the healthcare sector. 

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Jordan Grushkin, Attorney, Sheppard Mullin Law Firm, Health Care
Associate

Jordan Grushkin is an associate in the Corporate Practice group in the firm's Century City office.

  • J.D., Georgetown University Law Center, 2015

  • B.A., Georgetown University, 2015, magna cum laude

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