Maine Hospital Association, others sue the federal government over changes to drug discount program
Maine Hospitals Join Nationwide Protest Over 340B Program Changes
Portland, Maine – Hospitals across the United States are taking legal action against a federal overhaul of the 340B drug‑discount program that has long enabled them to purchase outpatient medications at reduced prices. The lawsuit, filed this Friday in the U.S. District Court for the District of Maine, names the Maine Hospital Association, Northern Light Eastern Maine Medical Center in Bangor, the American Hospital Association, and several hospitals in New York, Arkansas and North Dakota as plaintiffs.
The 340B program, administered by the Department of Health and Human Services (HHS), requires pharmaceutical manufacturers to sell certain outpatient drugs to hospitals at discounted rates. The savings are intended to fund charity care, behavioral health services and other community‑focused initiatives. The plaintiffs argue that HHS’s recent proposal to shift the program to a rebate model would cost hospitals an estimated $1 billion a year, while the agency has estimated the cost at $537 million.
“We can’t afford this,” said Jeff Austin, president of the Maine Hospital Association, in a statement accompanying the filing. “We already operate with an average of less than two weeks cash‑on‑hand, so these significant new costs will jeopardize our ability to care for the most vulnerable patients in our communities and affect the affordability and accessibility of care across Maine.”
HHS officials defended the changes as necessary, citing an expansion of the program’s reach beyond safety‑net providers and the resulting “large growth in participation and costs associated with the program.” The agency’s statement was released a day before the lawsuit was filed.
The lawsuit is part of a broader push by hospitals nationwide to challenge similar revisions first attempted by HHS in 2025. Federal courts had halted those earlier changes because HHS had not adequately accounted for the costs to hospitals. After that setback, HHS “moved forward with a revised version that was even more expensive,” the plaintiffs’ release said.
Steve Walsh, president and CEO of the American Hospital Association, called the proposed rebate program “massive new costs that would divert resources from the care of millions of patients.” He added that the AHA had proposed viable alternatives addressing transparency and program integrity concerns.
On the pharmaceutical side, Molly Jenkins, a spokesperson for the Pharmaceutical Research and Manufacturers of America, praised the HHS changes. “Big, tax‑exempt hospitals have long exploited 340B to line their pockets, and now they are fighting commonsense steps to prevent duplicate discounts in the program,” Jenkins said. The trade group is not a party to the lawsuit.
The case will test the balance between federal oversight of drug discounts and the financial realities of hospitals that rely on 340B savings to fund community health services. The federal court in Portland will hear arguments in the coming months, with the outcome potentially reshaping the program that supports care for underserved populations across the country.
