Judge Carl J. Nichols of the U.S. District Court for the District of Columbia on Oct. 29 denied a preliminary injunction that would have restored Corewell Health William Beaumont University Hospital’s access to discounted drug prices under the federal 340B program. His opinion nonetheless called the government’s power to delay that access “a difficult and close question.”
The ruling turned on money, not on the merits. The court found that the hospital did not show irreparable harm. The loss was financial and already complete, and the hospital never said how much remained recoverable or what share of its revenue the loss represented. The court said it was left wondering whether $5,000, $500,000, or $5 million could still be recovered.
The 340B program requires drugmakers to sell outpatient drugs at steep discounts to hospitals that serve many low-income patients. A hospital qualifies under one category at a time. The hospital in this case held disproportionate share hospital (DSH) status, which depends on a minimum DSH percentage.
According to the hospital, it feared in January 2026 that its percentage would fall below 11.75%. It applied during HRSA’s January registration window to switch to rural referral center (RRC) status, which carries a lower 8% threshold. HRSA approved the switch on Feb. 4, effective April 1. By April, the hospital found its fear was unfounded.
It applied again on or about April 15 to restore DSH status. HRSA rejected the application because the hospital’s “Authorizing Official” had not submitted an attestation within five days. HRSA denied reconsideration on June 11 and told the hospital to reapply in July, with any reinstatement effective no earlier than Oct. 1. Registration is quarterly and prospective, so the hospital lost discounted Orphan Drug pricing from April 1 to October 1. It says the process cost it millions of dollars.
The hospital sued under the Administrative Procedure Act. It argued that HRSA exceeded its authority by imposing registration requirements and deadlines that the 340B statute does not contain. It asked for a declaration and for an order reinstating DSH status retroactive to April 1. The defendants are Health and Human Services Secretary Robert F. Kennedy Jr., HRSA, and HRSA Administrator Thomas J. Engels. The case is No. 1:26-cv-03111.
Judge Nichols also denied the government’s motion to dismiss, finding that the hospital has standing. Manufacturer credit-and-rebill lookback windows, typically 1 to 12 months, were central. Because some money is recoverable, the windows supported standing and weakened the claim of irreparable harm.
The court upheld the attestation requirement and five-day deadline as reasonable procedural rules, finding no reason to call the deadline unreasonable.
The larger question remains open
The court said the hospital’s reading of the statute has “significant force.” The hospital argues that the statute requires certification only for some entity types (HIV, STD, and TB grantees), not DSHs. It cites Albany Medical, a recent D.D.C. decision that rejected a registration precondition for offsite facilities. HRSA argues that it must know who is participating, and that a quarterly system is a procedural mechanism.
The court floated, without ruling on it, a middle path: HRSA might require approval before purchasing but backdate status to the application date. It also noted that automatic access is hard to square with hospitals declaring themselves eligible.
What comes next
The decision is not a ruling on the merits. Both sides can still litigate whether prospective-only registration is lawful. For now, the attestation requirement stands.
For covered entities, the case points to three practices: reconcile to the cost report before changing a 340B category, treat registration windows as hard deadlines, and, if pricing is lost, document the dollars by quarter and by manufacturer lookback window right away.
Not legal advice.
Sources: Memorandum Opinion, ECF No. 29, No. 1:26-cv-03111 (D.D.C. Oct. 29, 2026); GovInfo docket record; Bloomberg Law (Sept. 4, 2026); 340B Report (Sept. 11, 2026); Lexology, “Hospital & Health Systems Reimbursement Check: October 2026.”