WEEKLY UPDATE: 01/08/26
The U.S. District Court of Maine recently granted a preliminary injunction blocking the implementation of the Health Resources & Services Administration’s (HRSA) 340B Rebate Model Pilot Program.
The decision was handed down only three days before the planned launch of the pilot program on January 1, 2026. The government immediately filed an appeal of the decision to the U.S. Court of Appeals for the First Circuit, but that appeal of the injunction was denied on Wednesday, January 7, and the pilot program remains on hold.
The court held that the government’s approval of the nine manufacturer applications that collectively comprise the entire 340B Rebate Model Pilot Program likely violated the Administrative Procedures Act, finding that it acted arbitrarily and capriciously by failing to address significant relation interests of 340B hospitals that have depended on the upfront discounts for more than three decades. The trial program would have required hospitals to purchase 340B drugs at full price and then pursue rebates from several drug companies retroactively — a measure that could significantly restrict the program’s reach and financial viability by imposing greater administrative burden on hospitals and handing control over to pharmaceutical companies.
The Connecticut Hospital Association (CHA) continues to participate in regional and national efforts to challenge the rebate model. In a statement shared with the media, American Hospital Association (AHA) President and CEO Rick Pollack said, “The First Circuit recognized that the district court’s decision halting the 340B Rebate Program was ‘careful and thorough’ — and correct. The AHA remains pleased that these courts have put on hold this harmful program that would have a devastating effect on America’s most vulnerable patients and communities, and the hospitals that serve them.”
The 340B Drug Pricing Program requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to qualifying healthcare organizations, such as hospitals and federally qualified health centers. The program helps hospitals stretch scarce resources to support uncompensated care, Medicaid underpayment, community-based services, and access to medications for underserved patients. Building regulatory roadblocks that jeopardize savings generated from the program would threaten hospitals’ ability to maintain and augment these critical services.
Every year, Connecticut hospitals redirect the savings from 340B discounts into services like free screenings for breast, skin, lung, and prostate cancers; transportation for patients to and from medical appointments; and vans that go into the community to provide pediatric dental services, to name just a few examples.
