Government drops appeal of preliminary injunction order in AHA 340B lawsuit on rebate model program

The federal government has dropped its appeal of a preliminary injunction blocking implementation of the Department of Health and Human Services’ 340B Rebate Model Pilot Program.

The move comes after the 1st U.S. Circuit Court of Appeals Jan. 7 denied the government’s motion for a stay in a lawsuit filed by the AHA, the Maine Hospital Association and four safety-net health systems challenging the program.

The 1st Circuit ruling follows a Dec. 29 decision from the U.S. District Court of Maine granting a preliminary injunction blocking implementation of the program, which was scheduled to go into effect Jan. 1. The district court held that the Health Resources and Services Administration’s approval of the nine manufacturer applications that collectively comprise the entire program likely violated the Administrative Procedures Act.

In a court filing, the government has signaled it will restart the administrative process related to the program; however, it has not released specific details. The AHA will continue to provide updates on this issue.