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Maine hospitals, peers sue federal government over changes to drug discount program

By Renee Cordes

The Maine Hospital Association and other organizations have filed a lawsuit aimed at preserving a drug discount program the Trump administration is seeking to replace with a rebate system.

The lawsuit, filed against Trump administration health officials in the U.S. District Court for the District of Maine, concerns a federal program that provides lower-cost drugs to hospitals and clinics that serve rural, poor and underserved populations. Defendants named in the lawsuit include Robert F. Kennedy Jr., secretary of the U.S. Department of Health and Human Services, and the department he leads.

Besides the Maine Hospital Association, plaintiffs include the American Hospital Association, St. Mary’s Regional Medical Center in Lewiston and four 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.

Steven Michaud
File Photo / Tim Greenway
Steven Michaud

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. 

“Maine’s hospitals are already facing very difficult financial conditions as they strive to continue providing a full range of care to their communities,” said Steven Michaud, president of the Maine Hospital Association. “Maine hospitals simply cannot afford the immense costs of this hastily imposed rebate program.”

Calling upfront drug discounts a “critical lifeline” for St. Mary’s, President Winfield Brown said that allowing the planned changes to go forward “despite the objections that have been raised would do irreparable harm to the patients of Androscoggin County and other communities like ours across the country.”

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