A federal judge in Maine has gone on to temporarily block the Department of Health and Human Services from executing a pilot project for a 340B rebate model.
On December 29, 2025, Judge Lance Walker went on to rule in favor of the American Hospital Association as well as other provider plaintiffs when it comes to granting a preliminary injunction.
HHS has been barred from executing the rebate program pending a further order, said Walker.
On the same day that the court went on to rule in favor of the hospitals, Robert F. Kennedy Jr., the HHS Secretary, appealed the decision to the United States Court of Appeals. The next day, on December 30, 2025, Walker denied the motion in order to stay the preliminary injunction pending the appeal.
Also, December 30, 2025, pharmaceutical companies such as Pharmacyclics, AstraZeneca Pharmaceuticals, AbbVie LP, Boehringer Ingelheim Pharmaceuticals, and Novo Nordisk, along with the Pharmaceutical Research and Manufacturers of America, went ahead and appealed to the Court of Appeals for the First Circuit on a decision from the federal court in Maine in order to deny them the intervenor status.
Apparently, the 340B rebate pilot should have gone into effect on January 1, 2026.
The American Hospital Association, along with other groups, went ahead and sued to prevent implementation of a model that, according to them, would harm the safety net providers.
The model would alter the hospital reimbursement for drugs in the 340B program from being upfront payments to back-end rebates.
Defendants say that a stay is indeed required so as to prevent any sort of disruption of industry preparation in order to execute a pair of major programs that have taken effect on January 1, 2026. Walker confirmed.
Interestingly, the judge went on to rule in favor of the American Hospital Association as well as other plaintiffs since HHS did not meet the minimum benchmarks set by the Administrative Procedure Act of the government before commencing a new program or policy.
Walker added that those minimal needs are simply that agency action should be reasonable as well as reasonably explained, as the ruling said. The government had to offer a reasoned explanation for its action.
There are competing directives when it comes to officer price concessions as per both 340B and the Drug Price Negotiation Program from the Inflation Reduction Act.
as per the court.
The Health Resources and Services Administration planned to begin a hastily assembled 340B Rebate Model Pilot Program on January 1, 2026, so as to deduplicate such kinds of price concessions, the ruling said.
This has gone on to involve a rather threadbare administrative record, which likely fails to consider as well as reasonably explain the effect of a rebate model when it comes to 340B hospitals, which depend on the upfront price concessions to go ahead and stretch few resources as much as possible in order to serve the rural and poor communities, Walker remarked. The APA is likely in need of more from defendants.