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Hospitals sue CMS over 340B drug changes

Hospitals are furious about cuts to an outpatient drug discount program. Photo: Gerry Broome / AP

Three hospital lobbying groups — the American Hospital Association, America's Essential Hospitals and the Association of American Medical Colleges — are suing the Centers for Medicare & Medicaid Services after the agency finalized a rule Wednesday that would drastically cut outpatient drug payments under the federal 340B drug discount program.

The big picture: The Trump administration is siding with the pharmaceutical industry, doctors and some independent researchers who have argued hospitals are abusing the 340B drug program by pocketing profits that are meant to lower the costs of drugs for poor patients. But many hospitals of last resort are at risk of losing millions of dollars, which spurred the federal suit.