AHA, others file suit to stop costly 340B rebate program from harming hospitals and patients 

The AHA, the Maine Hospital Association and four safety-net hospitals Oct. 9 filed a lawsuit in the U.S. District Court for the District of Maine challenging changes by the Department of Health and Human Services to the 340B Drug Pricing Program that would expand the use of a proposed rebate model previously halted by the courts.  

The lawsuit seeks to prevent implementation of the new program, which is scheduled to take effect on Jan. 1, 2027. The rebate program would impose significant new financial and administrative burdens on hospitals that participate in the 340B program. Estimates show the new program could impose more than $1 billion in annual administrative costs on already-strapped hospitals. 

“When the government makes a change of this magnitude, it must fully consider what it will mean for the patients and communities that rely on 340B hospitals every day,” said Steve Walsh, president and CEO of the AHA. “The AHA and its member hospitals provided detailed evidence showing that the Rebate Program would impose massive new costs and divert resources that support care for millions of patients. We also proposed viable alternatives that would address concerns about transparency and program integrity without imposing the same financial price tag. For the sake of our shared goal of protecting patients and expanding access to care, those costs, consequences and alternatives cannot be treated as afterthoughts. It’s unfortunate that we are back in court challenging the same flawed program.” 

Following HHS’ attempt to launch a similar rebate program in 2025, both the U.S. District Court for the District of Maine and the 1st U.S. Circuit Court of Appeals faulted HHS for moving forward with a rebate mechanism without adequately accounting for what it would cost the hospitals required to operate it. Shortly thereafter, HHS moved forward with a revised version of the same Rebate Program — only twice as large and even more expensive. 

The AHA and Maine Hospital Association are joined in this action by Eastern Maine Medical Center, Unity Medical Center in North Dakota, Dallas County Medical Center in Arkansas, and Nathan Littauer Hospital and Nursing Home in New York — all community-based healthcare providers that participate in the 340B program.  

See the press release for more details.