Hospitals Sue HHS Over Expanding 340B Drug Discount Rebate Changes

A coalition of hospitals led by the Maine Hospital Association and Northern Light Eastern Maine Medical Center lodged a complaint in the U.S. District Court in Portland against the Department of Health and Human Services. The suit contests recent revisions to the federal 340B drug discount program that would replace the existing pricing structure with a rebate system. Plaintiffs claim the new model could cost hospitals as much as $1 billion each year, whereas HHS projects a $537 million impact, and they warn that such expenses would deplete the already thin cash reserves of Maine hospitals and threaten charity services.

HHS argues the program has strayed from its original purpose of aiding safety-net providers, leading to inflated participation and costs, and that the reforms aim to eliminate duplicate discounts. Earlier attempts to revise the program in 2025 were blocked by courts for failing to consider hospital costs, yet HHS proceeded with a more expensive version. The American Hospital Association’s CEO warned the rebate would divert resources from patient care, while the Pharmaceutical Research and Manufacturers of America said the changes would improve transparency, though it is not a litigant.