Illustration: Sarah Grillo/Axios
Trump health officials are defending the Biden administration's decision to reject three drugmakers' changes to how safety net providers can get discounts under the 340B drug program.
Why it matters: A motion in U.S. District Court for the District of Columbia on Monday marked the first time the new administration has weighed in on the program, which covers more than $66 billion in drug purchases.
- Trump's team is seeking a summary judgment in response to lawsuits from Eli Lilly, Bristol Myers Squibb and Novartis over the Biden administration's efforts to stop manufacturers from carrying out 340B price reductions through rebates instead of upfront discounts.
What they're saying: HHS argues that Biden officials acted properly when they rejected the rebate model because it wasn't approved by the HHS secretary, and that efforts to unilaterally change the system weren't consistent with 340B law.
- The proposed rebate models would disrupt how the 340B program has operated for more than 30 years, and HHS' Health Resources and Services Administration "appropriately declined to disturb the status quo for now," Trump administration attorneys wrote.
- The filing noted that drugmakers could have worked with the agency to develop a price mechanism that addressed all stakeholders' concerns but that they instead "rushed to court to seek an order allowing them to unilaterally impose rebate models on covered entities."
Context: Drugmakers concerned with how the 340B program has rapidly expanded have moved over the past year to try to clamp down on how discounts are issued to hospitals, clinics and other safety net providers.
- Congress is eyeing possible changes, and some states have moved to set transparency requirements and other guardrails.
The other side: Hospitals argue that patient access to drugs could be jeopardized by a rebate system that would require some cash-strapped health systems to pay the full price of a drug upfront, then wait to be refunded the 340B discount.
What we're watching: Whether Trump's HHS could live with a rebate model if it has the final say. In the court filing, it noted that the law doesn't prohibit rebate models in the abstract, only instituting rebate models unilaterally.
- "The agency never said never," the filing states.
