Judge dismisses suit over 340B cuts; hospital groups vow to continue legal fight 

A federal judge has dismissed a lawsuit filed against the Department of Health and Human Services to block cuts to the 340B drug discount program. 

U.S. District Judge Rudolph Contreras dismissed (PDF) the case late last week, arguing that the American Hospital Association, America's Essential Hospitals and Association of American Medical Colleges have not used all other avenues to challenge changes to 340B before filing the lawsuit, which is required by law. 

The Centers for Medicare & Medicaid Services revealed in November 2017 that it intended to cut 340B payment rates from about 6% higher than the average price of drugs to 22.5% less than the average sales price. The cuts would reduce payments by $1.6 billion and went into effect yesterday following the suit's dismissal. The three industry groups, alongside several individual hospitals, filed suit against HHS shortly thereafter, arguing that the changes could severely impact safety-net hospitals and other facilities that treat low-income patients. 

RELATED: Who wins, who loses under 2018 changes to CMS' 340B drug discount program 

In a statement following the judge's ruling, the groups said they would continue to pursue the lawsuit and fight cuts to the program. 

“Making cuts to the program, like those CMS has put forward, will dramatically threaten access to healthcare for many communities with vulnerable patients," AHA President and CEO Rick Pollack said. "We are disappointed in this decision from the court and will continue our efforts in the Courts and the Congress to reverse these significant cuts to the 340B program.” 

Despite the response from hospitals and industry groups, some experts say the changes—and the judge's ruling—would benefit Medicare patients, who, according to CMS, would see more money in their pockets. 

"Flat out, this is a win for patients," Rena Conti, an associate professor of health policy at the University of Chicago, told The Wall Street Journal. 

RELATED: Hospitals, pharmaceutical companies spar over cuts to the 340B drug discount program 

But 340B Health, which represents more than 1,300 hospitals enrolled in the program, said in a statement that the judge's ruling "in no way ends the debate over this onerous and harmful regulation." 

The group said it would continue to work with lawmakers and other potential stakeholders to find a way to reverse CMS' cuts. 

"These payment cuts do nothing to lower drug prices, do not save Medicare a dollar, and won’t reduce costs for seniors and other patients," it said in the statement. "It’s time for Congress to act on legislation to stop the cuts and prevent the damage."