340B Drug Program’s Support of Vulnerable Communities Protected


Under the leadership of Bill Schultz, former General Counsel of the Department of Health and Human Services (HHS), the firm’s health care practice delivered two significant legal wins in the last year that are helping to ensure that the federal 340B drug discount program can continue to support nonprofit hospitals, community health centers and federally funded clinics that provide services for vulnerable communities, including low-income and uninsured individuals. 

The first case centered on the HHS’s plan to cut 340B drug reimbursement rates by almost 30 percent. On behalf of several hospitals and hospital trade groups, Zuckerman Spaeder sued HHS in November 2018 after the agency announced a proposed rule that would change the 340B reimbursement rate, thereby reducing payments by $1.6 billion per year. 

The plaintiffs were handed a significant victory in December 2018 and again in May 2019, when “Judge Rudolph Contreras [of the U.S. District Court for D.C.] sided with the hospital groups, reaffirming that cuts made under the 2018 Outpatient Prospective Payment System (OPPS) were unlawful and extended the ruling to include the 2019 cuts” after the complaint was amended to include that rule (FierceHealthcare). Although HHS has appealed the ruling, if it is upheld, HHS will have to remedy the $3.2 billion in cuts for 2018 and 2019 and address the cuts that it is making in 2020.

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