A controversial drug rebate program proposed by the Trump administration is on pause after a federal judge issued a preliminary injunction preventing the new rule from being implemented.
The Dec. 29 ruling was in response to a lawsuit filed against federal health officials in the U.S. District Court for the Court of Maine by the Augusta-based Maine Hospital Association, St. Mary’s Regional Medical Center in Lewiston, the American Hospital Association and several so-called “safety-net” health systems.
The groups allege that under a planned change to the federal 340B discount program, safety-net providers will have to pay drug manufacturers the full market price for drugs upfront and then seek reimbursement only after the medicines are administered to patients.
That amounts to a “monumental shift” that would impose hundreds of millions of dollars in annual costs and burdensome paperwork requirements on hospitals and other covered entities with no benefits to patients, the groups claim.
In last week’s ruling, Chief Judge Lance Walker for the District of Maine found that the Trump administration failed to follow the Administrative Procedures Act when developing a rebate pilot program and that irreparable harm would likely occur without an injunction. The court also found that the “balance of equities” and public interest weigh in favor of temporarily halting the rebate pilot.
Steven Michaud, president of the Maine Hospital Association, welcomed the ruling “as a huge victory for Maine hospitals and their patients.”
The ruling “preserves a program that provides critical funds to help hospitals treat and serve low-income patients,” he told Mainebiz via email.
“Big Pharma and some of their Washington, D.C., allies have been continually attempting to undermine the program and the court saw through that,” he added. “Let’s now hope they allow the program to continue without the constant attacks.”