MedMatrix Rx
340B Program Legal and Policy Updates
A federal court ruling has decertified 11 clinics from the 340B program, impacting their drug discount eligibility. AstraZeneca and other manufacturers have filed lawsuits against Illinois’ new 340B law, challenging its restrictions on contract pharmacies. The American Hospital Association is urging CMS to reconsider proposed changes to 340B reimbursement policies. Meanwhile, HRSA’s 340B Rebate Model Pilot Program is set to launch in 2027, affecting drug pricing strategies.
EXECUTIVE SUMMARY
01
Court decertifies 11 clinics from 340B program.
A federal judge ruled that 11 clinics failed to meet 340B statutory requirements, impacting their eligibility for drug discounts.
A federal judge ruled that 11 clinics failed to meet 340B statutory requirements, impacting their eligibility for drug discounts.
Source: Becker’s Hospital Review
02
AstraZeneca challenges Illinois’ 340B law.
AstraZeneca sued Illinois over its new 340B contract pharmacy law, joining AbbVie and Novartis in legal opposition.
AstraZeneca sued Illinois over its new 340B contract pharmacy law, joining AbbVie and Novartis in legal opposition.
Source: Becker’s Hospital Review
03
AHA opposes CMS’s 340B reimbursement cuts.
The AHA urged CMS not to finalize proposals increasing 340B repayment rates and cutting drug reimbursements.
The AHA urged CMS not to finalize proposals increasing 340B repayment rates and cutting drug reimbursements.
Source: Becker’s Hospital Review
04
HRSA’s 340B Rebate Model Pilot to launch in 2027.
HRSA announced a revised 340B Rebate Model Pilot Program, starting January 1, 2027, affecting drug pricing strategies.
HRSA announced a revised 340B Rebate Model Pilot Program, starting January 1, 2027, affecting drug pricing strategies.
Source: Drug Channels
05
CMS urged to change Medicare drug price negotiation rules.
Hospitals press CMS to require upfront negotiated Medicare drug prices, opposing retrospective rebates.
Hospitals press CMS to require upfront negotiated Medicare drug prices, opposing retrospective rebates.
Source: Becker’s Hospital Review
06
Federal court hears New York’s case against HHS.
New York filed a lawsuit against HHS in Maryland federal court, challenging 340B program changes.
New York filed a lawsuit against HHS in Maryland federal court, challenging 340B program changes.
Source: CourtListener
07
Illinois faces multiple lawsuits over 340B law.
Several pharmaceutical companies, including AbbVie and Novartis, filed lawsuits against Illinois’ 340B contract pharmacy law.
Several pharmaceutical companies, including AbbVie and Novartis, filed lawsuits against Illinois’ 340B contract pharmacy law.
Source: Endpoints News
08
Froedtert Memorial sues CVS Health over 340B issues.
Froedtert Memorial Lutheran Hospital filed a lawsuit against CVS Health in Wisconsin federal court over 340B program disputes.
Froedtert Memorial Lutheran Hospital filed a lawsuit against CVS Health in Wisconsin federal court over 340B program disputes.
Source: CourtListener
09
Congress considers new 340B reform legislation.
Six senators introduced the SUSTAIN 340B Act, adding to the legislative push for 340B program reforms.
Six senators introduced the SUSTAIN 340B Act, adding to the legislative push for 340B program reforms.
Source: Becker’s Hospital Review
10
Azurity Pharmaceuticals files lawsuits in multiple states.
Azurity Pharmaceuticals filed lawsuits in Pennsylvania and Florida federal courts related to 340B program disputes.
Azurity Pharmaceuticals filed lawsuits in Pennsylvania and Florida federal courts related to 340B program disputes.
Source: CourtListener
EXECUTIVE SUMMARY — KEY TAKEAWAYS
Most important 340B implication. The decertification of 11 clinics from the 340B program is important for strict adherence to statutory requirements. This decision could lead to increased scrutiny and audits of other participating entities. Clinics and hospitals must ensure compliance with all 340B eligibility criteria to avoid similar outcomes. This ruling may also embolden drug manufacturers to challenge other entities they believe are not meeting the program’s requirements.
Emerging risks.
- Hospitals face increased financial pressure from potential CMS 340B reimbursement cuts.
- Legal challenges to state 340B laws could disrupt contract pharmacy arrangements.
- Non-compliance with 340B requirements risks decertification and loss of drug discounts.
- Uncertainty in 340B program rules may complicate financial planning for covered entities.
Emerging opportunities.
- HRSA’s 340B Rebate Model Pilot offers a chance to test new drug pricing strategies.
- Hospitals can advocate for policy changes that align with their financial interests.
- Engagement in legislative processes could shape future 340B program reforms.
- Entities can strengthen compliance practices to safeguard 340B participation.
Key actions for providers.
- Review and ensure compliance with 340B eligibility requirements to prevent decertification.
- Engage with CMS on proposed 340B reimbursement changes to influence outcomes.
- Monitor legal developments in Illinois and other states affecting 340B laws.
- Prepare for HRSA’s 340B Rebate Model Pilot by assessing potential impacts on pricing.
TOP STORIES
Court decertifies 11 clinics from 340B program.
Becker’s Hospital Review · August 20, 2026
- A federal judge ruled that 11 clinics did not meet 340B statutory requirements.
- The decision affects clinics in Nevada that received funding through Sagebrush Health Services.
AstraZeneca challenges Illinois’ 340B law.
Becker’s Hospital Review · August 17, 2026
- AstraZeneca filed a lawsuit against Illinois’ new 340B contract pharmacy law.
- The law restricts manufacturers from limiting contract pharmacy use and data collection.
AHA opposes CMS’s 340B reimbursement cuts.
Becker’s Hospital Review · August 26, 2026
- AHA urged CMS not to finalize proposals cutting 340B drug reimbursement rates.
- Proposed changes would increase repayment rates from 0.5% to 3% annually.
FEDERAL POLICY & REGULATORY DEVELOPMENTS
HRSA’s 340B Rebate Model Pilot to launch in 2027.
Drug Channels · August 25, 2026
- The pilot program will begin on January 1, 2027.
- It will focus on drugs representing less than 5.5% of 2025 340B sales.
CMS urged to change Medicare drug price negotiation rules.
Becker’s Hospital Review · August 18, 2026
- Hospitals want CMS to require upfront negotiated drug prices.
- The AHA opposes retrospective rebates in the proposed rule.
Congress considers new 340B reform legislation.
Becker’s Hospital Review · August 10, 2026
- Six senators introduced the SUSTAIN 340B Act.
- The act is part of broader legislative efforts to reform the 340B program.
STATE DEVELOPMENTS
Illinois Enacts HB 2371 to Protect 340B Covered Entities and Contract Pharmacies
ACI Monthly · August 17, 2026
- Illinois Governor signed HB 2371 into law. This law provides protections for 340B covered entities and their contract pharmacies.
- The law aims to safeguard the integrity of the 340B Drug Pricing Program within the state.
- The legislation addresses concerns over potential restrictions and audits that could impact 340B operations.
LITIGATION & ENFORCEMENT WATCH
| Court | Matter | Date |
|---|---|---|
| D.D.C. | Amgen and Genentech v. 11 Clinics (Decertification) [source] | August 20, 2026 |
| N.D. Ill. | ASTRAZENECA PHARMACEUTICALS LP v. KWAME RAOUL, in his official capacity as ATTORNEY GENERAL of the STATE OF ILLINOIS [source] | August 14, 2026 |
| E.D. Wis. | Froedtert Memorial Lutheran Hospital Inc v. CVS Health Corporation [source] | August 20, 2026 |
| D. Maryland | STATE OF NEW YORK v. U.S. Department of Health and Human Services [source] | August 27, 2026 |
SOCIAL MEDIA & STAKEHOLDER SENTIMENT
The following items were identified through a web search for recent stakeholder and social commentary on the U.S. 340B Drug Pricing Program from the past 90 days, including reactions, statements, op-eds, and advocacy positions from hospital and health-center groups, provider and patient advocates, drug manufacturers, PBMs, and policy commentators.
340B Health Urges Swift Federal Action After Eli Lilly Cuts Off 340B Pricing to Hospitals
340B Health · June 18, 2026
- Main theme: Eli Lilly’s termination of 340B pricing for certain hospitals and the call for federal enforcement action.
- Stakeholder sentiment: Maureen Testoni, President and CEO of 340B Health, stated, “Eli Lilly’s refusal to provide 340B pricing to hospitals that do not surrender to its sweeping claims data demands does not, in our view, represent a legitimate offer by Lilly to sell drugs to covered entities at the 340B price.”
- Potential implications: Potential increase in drug costs for safety-net providers and reduced access to care for vulnerable patients.
- Credibility: 340B Health is a nonprofit membership organization representing over 1,600 hospitals participating in the 340B program.
WHAT TO WATCH NEXT
- HRSA’s 340B Rebate Model Pilot Program launch on January 1, 2027. [source]
- CMS’s final decision on proposed 340B reimbursement changes. [source]
- Outcome of AstraZeneca’s lawsuit against Illinois’ 340B law. [source]
- Congressional actions on the SUSTAIN 340B Act. [source]
End of briefing.
This briefing is provided for informational purposes only and does not constitute legal, regulatory, financial, or compliance advice. Automated summarization may contain errors or omissions, and source materials may change after publication. Recipients should independently verify all information against the cited primary sources before relying on it.
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