Hospital group wants Trump administration to block a new Lilly policy on 340B claims data

STAT News – Monday, January 26, 2026
By Ed Silverman

The American Hospital Association is asking the Trump administration to stop Eli Lilly from enacting a new policy that would require all hospitals that participate in a federal drug discount program to submit comprehensive claims data, the first time that a large pharmaceutical company has taken such a step.

The new Lilly policy, which is slated to go into effect on Feb. 1, expands on an earlier move to reduce its costs for selling medicines to hospitals that participate in the 340B Drug Pricing Program. For the past four years, Lilly only required contract pharmacies working with hospitals to provide claims data.

But as of next week, the company wants all participating hospitals and clinics — except those located in 11 states — to submit claims data in a bid to reduce what it called duplicate discounts, an issue that has riled the pharmaceutical industry and contributed to a long-standing clash with hospitals over the 340B discount program.

The 340B program was created more than three decades ago to help hospitals and clinics care for low-income and rural patients. Drugmakers that want to take part in Medicare or Medicaid must offer their medicines at a discount — typically, 25% to 50%, but sometimes higher — to participating hospitals and clinics.

The pharmaceutical industry, however, has argued that hospitals abuse the program and divert payments to other uses, such as fueling consolidation of health care systems that, in some cases, favor wealthy communities. As a result, the pharmaceutical and hospital industries have squared off over pricing, billing, and claims data.

For the past few years, some drugmakers have warned they may withhold discounts if they do not receive sufficient claims data for Medicaid patients. The pharmaceutical companies have argued they need to avoid paying duplicate discounts and had sought claims data on patients who are also covered by Medicare Part D and commercial health insurance.

In conveying its expanded policy on Jan. 15, Lilly said that claims data from contract pharmacies made it possible to “identify countless instances of Medicaid duplicate discounts.” By demanding hospitals also provide data, Lilly hopes to “identify the full universe of duplicate discounts and other program abuses [and] preserve our ability to initiate audits.”

Since Lilly and other drugmakers began demanding in 2021 that contract pharmacies submit claims, submitting such data “has become standard business practice across the industry and has become an increasingly seamless part of the 340B purchasing system,” Lilly wrote in a recent notice to hospitals about its new policy.

The American Hospital Association, however, argues that the new requirements “will vastly increase the costs and burdens on 340B hospitals,” according to a Jan. 26 letter the trade group wrote to the Health Resources and Services Administration, which oversees the 340B discount program.

The trade group maintained that costs will rise to “onerous” levels because of the complicated, behind-the-scenes efforts to capture claims data from different in-house computer systems. And the American Hospital Association also noted the requested data will extend to both pharmacy and medical claims.

“At best, Lilly’s new requirements will be prohibitively costly for 340B hospitals. At worst, they will be unworkable. Either way, they will prevent hospitals from obtaining the 340B discounts they are owed by statute,” the trade group wrote. As a result, they argued the expanded policy is “unlawful.”

In its Jan.15 notice to hospitals, Lilly warned that the hospitals may lose access to 340B discounted pricing if they fail to provide “timely, complete, and accurate” claims data for all medicines dispensed at 340B prices.

A Lilly spokesman wrote to say that “Lilly’s expansion of its longstanding collection of minimal and readily available claims data to include in-house pharmacies is consistent with the 340B statute and the decisions of two federal courts of appeals. AHA’s arguments are wrong, and it should stop opposing common-sense policies that will improve compliance, transparency, and the long-term sustainability of the manufacturer-funded 340B program.”

We asked the HRSA for comment and will update you accordingly.

The battle over claims data is only the last clash between the pharmaceutical and hospital industries stemming from the 340B discount program.

Two weeks ago, the hospitals won a round when the Trump administration signaled plans to drop its appeal of a court order that blocked a pilot program from changing payment terms for the discount program. The AHA and several hospital systems had filed a lawsuit challenging a plan that allowed drug companies to pay rebates — instead of discounts — for some medicines purchased under the program.

That move came after a U.S. appeals court panel had refused to allow the HRSA to proceed after deciding the agency failed to adequately consider the consequences for safety-net hospitals and clinics that participate in the discount program. The pilot was supposed to go into effect on Jan. 1.

Some drugmakers had sought to change payment terms to avoid double discounts, an issue that can be traced, in part, to the Inflation Reduction Act, which allows Medicare to negotiate prices of some drugs. This alarmed companies whose medicines, including big-selling heart and cancer treatments, were selected by Medicare for price negotiations.

The Inflation Reduction Act imposes a maximum fair price on drugs paid for by Medicare and obligates drugmakers to pay added inflation rebates in Medicare. But the requirement overlaps with 340B, because drugmakers must offer hospitals the lower of the maximum fair price or 340B price, and pay inflation rebates only on drugs not sold at the 340B price.

Access this article at its original source.