Back to the Drawing Board: HHS Scraps Initial 340B Rebate Pilot Program

In a joint motion filed February 5^th with the U.S. District Court for the District of Maine, the U.S. Department of Health and Human Services (“HHS”) stated that it would terminate its current 340B Rebate Pilot Program (the “Program”), which we discussed previously on this blog. The Program’s termination follows the filing of a lawsuit by the American Hospital Association, the Maine Hospital Association, and certain health systems (the “Hospitals”) on December 1, 2025. In their lawsuit, the Hospitals alleged that HHS’s Program implementation violated the Administrative Procedure Act (the “APA”) due to the paucity of the administrative record and the failure of HHS to consider the interests of 340B covered entities. In late December, the court granted the Hospitals’ request for a preliminary injunction, concluding that the Hospitals were likely to succeed on their APA claims. This injunction halted HHS from initiating the Program, which was scheduled to go into effect January 1, 2026.

As we discussed in September, the Program was intended to replace the 340B program’s traditional up-front discount structure with post-purchase rebates for a limited set of drugs. 340B covered entities would pay a higher up-front cost for these drugs and then request manufacturer rebates representing the difference between the purchase price and the 340B price for the relevant drugs. Those in support of the Program argued that it would improve program transparency and help curb duplicate discounts. Others, including the Hospitals, argued that the Program would harm 340B covered entities by increasing administrative and financial burdens.

In its preliminary injunction ruling, the court noted that Congress clearly gave HHS the option of initiating a rebate model under the 340B program but that implementation of such a model must be done in accordance with the APA’s requirements. In the joint motion, HHS and the Hospitals acknowledged that HHS may decide to develop a new 340B rebate program, but HHS conceded that any new program proposal will be subject to a new notice and comment period and a 90-day period between approval of drug manufacturer applications and the new program’s effective date.

On February 17^th, HHS’s Health Resources and Services Administration (“HRSA”) issued a Request for Information (the “RFI”) concerning the development of a 340B model pilot program. The RFI seeks input from stakeholders, including manufacturers and covered entities, to help it further evaluate the potential benefits and costs of a rebate model. Comments are due by March 19, 2026. Thus, while 340B covered entities may be relieved of having to adapt to HHS’s initial attempt to shift 340B toward a rebate model, this doesn’t appear to be the end of the story, and there is no guarantee that another similar program will not be implemented in the future.

FDA Continues to Ease Regulatory Hurdles for Wearable Health Products

By Delia Deschaine, John Wyand, Nicole Bothwell and Jennifer Tharp on February 20, 2026 Posted in FDA, Medical Device, Technology

The U.S. Food and Drug Administration (FDA) recently updated two guidance documents applicable to wearable devices and guidance for clinical decision support tools, continuing the agency’s efforts to ease regulatory hurdles for digital health tools and potentially the use of artificial intelligence. The updates expand the type of digital health tools, including certain general wellness wearable devices and clinical decision support software, that are either exempt from medical device requirements or will be subject to enforcement discretion by FDA.

Key Takeaways

The key takeaways for industry to consider include the following:

Software functions intended primarily for maintaining or encouraging healthy lifestyles will not likely be regulated as medical devices in and of themselves. However, once such functions begin providing functionality for clinical management or are intended to treat a disease or condition, then the software risks classification as a device.
Clinical decision support tools that analyze patterns or signals are generally regulated as a device while tools that measure physiological parameters that are not specifically intended or marketed for a purpose identified in the device definition are not medical devices.
FDA has indicated it intends to exercise enforcement discretion for software functions that provide only a single recommendation intended for the purpose of supporting or providing recommendations to a healthcare professional about prevention, diagnosis, or treatment of a disease or condition.
FDA is developing a database to track wearable medical devices, including those with sensor-based digital health technology referred to as sDHT. These sDHT devices are generally subject to premarket notification requirements.

Indiana Approves a Presumptively Anticompetitive Hospital Merger: Five Lessons for the Future of Antitrust in Healthcare

By Christopher Gordon on November 20, 2025 Posted in Antitrust, FTC, Hospitals, Mergers and Acquisitions

The Indiana Department of Health recently approved a major hospital merger in Terre Haute between Union Health and HCA Healthcare’s Terre Haute Regional Hospital. Under traditional antitrust analysis, the transaction is the kind of horizontal consolidation that would raise serious red flags. The combined system will control nearly all inpatient hospital services in Vigo County, and the state itself acknowledged that the merger is “presumptively anticompetitive.”

Yet the deal moved forward, largely because it was evaluated not under federal merger law, but under Indiana’s Certificate of Public Advantage (COPA) framework, which allows the state to approve consolidations in exchange for price, quality, and service commitments enforced through regulatory oversight.

The decision, and the debate around it, offers a useful case study in the ongoing tension between competition policy and states’ desire to preserve access, stabilize financially strained hospitals, and maintain local control. For healthcare companies, insurers, providers, and counsel, the Indiana approval provides five important lessons.

FTC Enforcement of Interlocking Directorates: What Health Care Entities Should Know

By Christopher Gordon, Daniel Berick and Anushkay Raza on November 4, 2025 Posted in Antitrust, DOJ, FTC, Governance/Management

For many health care organizations, including hospital systems, physician groups, and private equity–backed health care platforms, board and governance structures have grown increasingly complex as the industry consolidates and integrates across service lines. It is common for executives, physicians, and investor representatives to hold board seats or observer roles across affiliated or partnered entities. While such arrangements may promote strategic collaboration or oversight, recent enforcement activity by the Federal Trade Commission (the “FTC”) underscores the need for careful attention to potential interlocking directorates under Section 8 of the Clayton Act, particularly when governance overlaps occur among entities that provide competing services or operate in overlapping geographic or patient markets.

U.S. Government Shutdown 2025 (Week 1): Early Insights into FDA Operations

By Delia Deschaine, John Wyand and Xiaomei Cai on October 13, 2025 Posted in Events, FDA

The 2025 U.S. government shutdown kicked in effective at 12:01am, October 1, 2025, and as of this posting, has been in place for over a week. The shutdown will continue indefinitely until Congress unifies and resolves the budget impasse.

The U.S. Food and Drug Administration (“FDA”), tasked with protecting public health by ensuring the safety, effectiveness and quality of drugs, biologics, medical devices, food and other regulated products within the broader Department of Health and Human Services (“HHS”), will undoubtedly experience disruptions on its operations in this period.

FDA is not expected to go dark completely. The FY 2026 HHS Contingency Staffing Plan[1] and the FDA-specific contingency plan[2] released right before the shutdown lay out how the Department and FDA will operate in the absence of enacted annual appropriations. These plans provide a roadmap to ensure most of FDA’s core functions continue to operate during this time. This is achieved through two main mechanisms: (1) exempting activities funded through carryover user fee funding and other unlapsed funding; and (2) relying on exclusions in the Anti-Deficiency Act (“ADA”) to continue activities related to imminent threats to the safety of human life or protection of property. Under the umbrella of these exemptions and exclusions, a majority (86%) of FDA staff are expected to be retained during the lapse. This, however, does not obscure the fact that a significant number of FDA’s responsibilities will be constrained by the lapse. Such responsibilities are still critical to protecting and promoting public health.

Healthcare in the Crosshairs: FTC’s New Playbook on Non-Compete Agreements

By Christopher Gordon on September 17, 2025 Posted in Antitrust, FTC

What happened. On September 10, 2025, the FTC announced it sent warning letters to a number of healthcare employers and staffing firms about potentially unlawful non-compete provisions, signaling the agency’s renewed focus on labor restraints in healthcare. The letters urge recipients to reassess existing contracts and warn that the FTC may open investigations if provisions are overbroad or unfair.

Case-by-case enforcement is the plan. Just days earlier, the Commission voted 3-1 to drop its appeals and “accede to vacatur” of its nationwide Noncompete Rule, which has been enjoined since August 2024. The agency underscored that, even without a rule, it will pursue individual matters under Section 5 of the FTC Act, which prohibits “unfair methods of competition.” Expect investigations and settlements rather than a one-size-fits-all federal ban.

A fresh consent order shows the template. On September 4, 2025, the FTC ordered Gateway Services, the nation’s largest pet cremation company, to stop enforcing non-compete agreements covering roughly 1,800 workers. Although outside traditional provider settings, the case highlights the kinds of features the FTC is targeting (broad restrictions imposed on non-executive employees) and foreshadows scrutiny of similar terms in healthcare and staffing.

HRSA to Test 340B Rebate Model in Pilot Program

By Robert Nauman on September 3, 2025 Posted in 340B Program, Hospitals, Pharmaceutical

On July 31, 2025, the U.S. Department of Health and Human Services Health Resources and Service Administration (HRSA) announced the availability of a new 340B Rebate Model Pilot Program (the Rebate Pilot Program). Under this Rebate Pilot Program, instead of receiving discounts on the purchase price for certain drugs, covered entities will receive a post-purchase rebate reflecting the difference between the higher upfront cost and the drug’s 340B price. The stated purpose of the Rebate Pilot Program is to test this rebate model on a select group of drugs in a “methodical and thoughtful approach to ensure a fair and transparent 340B rebate model process for all stakeholders involved.” The program is also intended to help HRSA better understand the merits and shortcomings of a 340B rebate model from various perspectives. Initially the Rebate Pilot Program will be limited to those drugs included on the CMS Medicare Drug Price Negotiation Selected Drug List[1], but may be expanded in the future to include other drugs.

Amedisys Pays $1.1 Million for HSR Compliance Lapse Amid Pending UnitedHealth Deal

By Christopher Gordon on August 12, 2025 Posted in Antitrust, Compliance, DOJ, FTC, Mergers and Acquisitions

Amedisys, a major provider of home health and hospice care, has agreed to pay a $1.1 million civil penalty to settle allegations that it violated the Hart-Scott-Rodino (HSR) Act during the antitrust review of its pending $3.3 billion acquisition by UnitedHealth’s Optum division.

What Happened

In December 2023, while responding to a DOJ “Second Request” for information, a mandatory step in large merger reviews, Amedisys filed a sworn certification that its production was “true, correct, and complete.” In reality, the company knew that its email archiving system had malfunctioned, causing the loss of a month’s worth of emails from May–June 2023, a critical period in the merger negotiations.

Rather than flagging this gap at the time, Amedisys submitted its certification without mentioning the problem. Those missing emails could have contained substantive discussions relevant to the DOJ’s competition analysis. The company ultimately filed a corrected certification in August 2024, more than eight months later, but by then had been out of compliance for each day in between.

Food and Drug Administration (FDA) Issues Draft Guidance on Transfer of 510(k)s

By Squire Patton Boggs on June 24, 2025 Posted in FDA, Medical Device, Technology

On June 5, 2025, the FDA issued draft guidance addressing frequently asked questions regarding the transfer or sale of a 510(k) clearance from one 510(k) holder to another. As transfer of 510(k)s is a common issue during transactions involving medical devices, this guidance, if finalized as written, will provide helpful insight regarding the FDA’s position on the 510(k) requirements in the context of such transactions.

Squire Patton Boggs attorneys Nicole Bothwell, Delia Deschaine, John Wyand, Stephen Chelberg and Jennifer Tharp discuss the FDA’s new guidance in our latest Client Alert, which may be found here.

Trump Signs Executive Order to Reduce U.S. Drug Prices with “Most-favored Nation” Policy and CMS Establishes Pricing Targets

By Squire Patton Boggs on June 17, 2025 Posted in Executive Actions, Pharmaceutical

On May 12, President Trump signed an executive order entitled “Delivering Most-Favored Nation Prescription Drug Pricing to American Patients” (the “Order”). At the core of the executive order is a commitment to most-favored nation (“MFN”) pricing for drugs sold in the U.S. Under MFN pricing, Americans would pay no more for prescription drugs than the lowest prices for which those drugs are sold in other developed countries. To implement MFN pricing, the Order directs the U.S. Trade Representative and Secretary of Commerce to take steps against foreign nations that the Administration believes to be suppressing drug prices abroad in ways that unfairly shift higher costs onto American consumers. It also instructs the Administration to communicate clear pricing targets to pharmaceutical companies, reinforcing that U.S. consumers should receive the most favorable pricing. Further, it directs the Secretary of Health and Human Services to establish a mechanism through which American consumers can buy drugs directly from manufacturers rather than intermediaries. Lastly, the Order instructs the Secretary of Health and Human Services to impose MFN pricing through regulations on drug manufacturers that do not voluntarily adopt MFN pricing and to take other steps to reduce the costs of drugs for U.S. consumers.