A recent U.S. District Court decision delivers meaningful relief for 340B-eligible hospitals, including many UISS members. The ruling vacates a 2013 Health Resources and Services Administration (HRSA) policy that had barred certain 340B hospitals from using group purchasing organizations (GPOs) for initial purchases of covered outpatient drugs.
With the government's appeal period now expired and no appeal filed, the decision stands — providing eligible hospitals with a clearer, more workable path for GPO purchasing of outpatient drug inventory.
The vacated policy had imposed significant administrative and operational burdens, requiring hospitals to manage complex, duplicative purchasing and inventory processes. Compliance costs were estimated between $500,000 and $1.6 million annually, depending on organizational size and complexity. Its removal opens the door for hospitals to once again leverage discounted GPO pricing on initial outpatient drug purchases — reducing costs and simplifying workflows without compromising 340B compliance.
"Healthcare providers continue to face extraordinary financial and operational pressures, particularly in pharmacy," said Bruce Radcliff, President of Supply Chain Services at Premier, which brought the legal challenge on behalf of its members. "The court's decision provides important clarity and removes a policy that created unnecessary complexity and cost for hospitals. We are pleased that providers now have greater flexibility to manage pharmacy purchasing in a manner that supports financial sustainability while maintaining compliance with the 340B program."
It's worth noting that HRSA retains the authority to pursue future rulemaking on this issue, which would include an opportunity for stakeholder input. UISS will continue to monitor any developments.
UISS is here to help members assess the implications of this decision, identify potential savings opportunities through our GPO contracts, and navigate implementation. If you have questions about how this ruling may affect your organization, please contact us.