U.S. Supreme Court Unanimously Rules In Favor Of Hospitals In 340B Decision

On June 15, 2022, the U.S. Supreme Court unanimously ruled to overturn a 2020 determination out of the U.S. Court of Appeals for the District of Columbia Circuit sustaining the authority of the Division of Well being and Human Companies (HHS) to cut back funds to sure lined entities that take part within the 340B drug pricing program.

This determination may point out that this Supreme Court might apply the textual which means of statutes and laws when ruling on future circumstances and controversies even exterior of the 340B program. 

The ruling states that the practically 30 % discount in Medicare reimbursement for outpatient drug funds for hospitals collaborating within the 340B drug pricing program applied in 2018 and 2019 had been illegal.  

In his opinion, Justice Brett Kavanaugh particularly famous the reimbursement charge of the typical gross sales value (ASP) plus 6 % for non-340B hospitals remained the identical. Nevertheless, 340B hospitals obtained a lowered reimbursement charge of ASP minus 22.5 % primarily based on “an estimate from the Medicare Payment Advisory Commission that 340B hospitals obtained prescription drugs at an average discount of at least 22.5 percent below the average sales price charged by manufacturers.” 

In accordance with the ruling, HHS doesn’t have the authority to cut back reimbursement charges for 340B hospitals with out conducting a survey of the hospitals’ pharmaceutical acquisition prices. As a result of HHS didn’t conduct any surveys, the Court discovered that HHS’s 2018 and 2019 reimbursement charges for 340B acquired medication at 340B hospitals had been illegal. 

Justice Kavanaugh identified that “for … 340B hospitals, this case has immense economic consequences, about $1.6 billion annually.” As such, hospitals and different lined entities ought to calculate any misplaced reimbursement and proceed to observe the results of this ruling, as they can enchantment and be entitled to further reimbursement. 

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