CHA News Article

Federal Court Rules Against Cuts for California Safety Net Providers in 340B Drug Program

The U.S. District Court, Central District of California, has ruled against the California Department of Health Care Services in a case centering on a state law that cut reimbursement to safety net providers participating in the federal 340B drug pricing program.

The court ruled in favor of the plaintiff AIDS Healthcare Foundation, which asserted that the state drastically cut drug reimbursements to 340B safety net providers and forced them to accept payment amounts that did not cover their dispensing costs. The court found that the state decreased the 340B providers’ drug reimbursement — but not those of their commercial pharmacy counterparts — without considering whether doing so would be consistent with Medicaid program efficiency, economy, and quality of beneficiary care, nor did the state consider whether Welfare and Institutions Code Section 14105.46 would have an adverse impact on Medi-Cal beneficiaries’ access to health care services to the same extent as the general public. A copy of yesterday’s court ruling, as well as the final findings and judgment, are attached.