BERZON, Circuit Judge:
These consolidated appeals were brought by defendants seeking to reduce their sentences for drug-related crimes. They invoke 18 U.S.C. § 3582(c)(2), which allows a court to reduce in certain circumstances a previously imposed sentence, and contend that the Supreme Court's recent interpretation of § 3582(c)(2) in Hughes v. United States , --- U.S. ----, 138 S. Ct. 1765, 201 L.Ed.2d 72 (2018), requires that their motions for resentencing be granted, Ninth Circuit precedent to the contrary notwithstanding. See United States v. Padilla-Diaz , 862 F.3d 856 (9th Cir. 2017).
*1130We conclude that Padilla-Diaz and Hughes are fully compatible. As Padilla-Diaz remains binding precedent, we affirm the district courts' denials of defendants' motions to receive sentence reductions pursuant to 18 U.S.C. § 3582(c)(2).
I
A
We begin with a brief overview of the statutory framework governing sentence reduction proceedings. Ordinarily, a federal court "may not modify a term of imprisonment once it has been imposed." See 18 U.S.C. § 3582(c). Congress has provided narrow exceptions to this proscription, including one based on changes to the United States Sentencing Guidelines ("Guidelines"): "A court may modify a defendant's term of imprisonment if the defendant was 'sentenced ... based on a sentencing range that has subsequently been lowered' pursuant to a retroactive amendment to the U.S. Sentencing Guidelines." United States v. Rodriguez , 921 F.3d 1149, 1153 (9th Cir. 2019) (quoting 18 U.S.C. § 3582(c) ).
Where the "based on" requirement is met, § 3582(c)(2) establishes a two-step inquiry for sentence reduction proceedings.1 At the first step, the district court decides eligibility for sentence reduction by determining whether "a reduction is consistent with applicable policy statements issued by the Sentencing Commission." Id. ; see also Dillon v. United States , 560 U.S. 817, 826, 130 S.Ct. 2683, 177 L.Ed.2d 271 (2010). The policy statement applicable to § 3582(c)(2), United States Sentencing Guidelines Manual ("U.S.S.G.") § 1B1.10, authorizes a sentence reduction if, but only if, the retroactive amendment has the "effect of lowering the defendant's applicable [G]uideline[s] range." U.S.S.G. § 1B1.10(a)(2)(B). Applying this policy statement, a district court determines whether the Guidelines range is lowered by calculating the "amended [G]uideline[s] range that would have been applicable to the defendant if the [relevant amendment] to the [G]uidelines ... had been in effect at the time the defendant was sentenced." Id. at § 1B1.10(b)(1).
But that determination may not be the end of a district court's inquiry into eligibility for sentence reduction. Another provision of the policy statement-the one of principal relevance here-generally prohibits sentence reduction if the original term of imprisonment is below the lower end of the amended Guidelines range. See id. § 1B1.10(b)(2)(A).2 The only exception to this limitation is where the defendant's original term of imprisonment was below the Guidelines range because of a reduction *1131for substantial assistance to authorities and a § 3582(c)(2) sentence reduction would be comparably below the amended Guidelines range. See id. at § 1B1.10(b)(2)(B).
The second step of the § 3582(c)(2) inquiry applies to defendants determined eligible for sentence reduction. The court considers the 18 U.S.C. § 3553(a) factors and determines whether "the authorized reduction is warranted, either in whole or in part, according to the factors." Dillon , 560 U.S. at 826, 130 S.Ct. 2683 ; see also 18 U.S.C. § 3582(c)(2). But the "court's consideration of the § 3553(a) factors may not 'serve to transform the proceedings under § 3582(c)(2) into plenary resentencing proceedings.' " Rodriguez , 921 F.3d at 1154 (quoting Dillon , 560 U.S. at 827, 130 S.Ct. 2683 ).3
B
Each of the twenty-three defendants in these consolidated cases was convicted of one or more drug-related offenses. The defendants' original terms of imprisonment were therefore calculated according to the Guidelines' drug quantity table, which determines the base offense level for drug-related offenses according to drug type and weight. In 2014, the U.S. Sentencing Commission adopted Amendment 782, which revised the Guidelines' drug quantity table by reducing the base offense level for most drugs and quantities by two levels. See U.S.S.G. supp. app. C amend. 782 (Nov. 1, 2014); U.S.S.G. § 2D1.1(c). Amendment 782 was later made retroactive for defendants, including those in this consolidated proceeding, who had been sentenced before the adoption of the Amendment. U.S.S.G. supp. app. C amend. 788 (Nov. 1, 2014).
Invoking Amendment 782, each defendant filed a § 3582(c)(2) motion to reduce his sentence. The assigned district courts denied the sentence reduction motions, concluding that the defendants were categorically ineligible under § 1B1.10(b)(2)(A) because downward variances or departures at the time of sentencing had resulted in original terms of imprisonment below the amended Guidelines range. The district courts further concluded that the defendants were not eligible for § 1B1.10(b)(2)(B)'s limited exception, as their downward variances or departures had not been based on substantial assistance to authorities. Defendants appealed.
We review for abuse of discretion a district court's decision on a § 3582(c)(2) sentence reduction motion. United States v. Dunn , 728 F.3d 1151, 1155 (9th Cir. 2013). "A district court may abuse its discretion if it does not apply the correct law or if it rests its decision on a clearly erroneous finding of material fact." United States v. Sprague , 135 F.3d 1301, 1304 (9th Cir. 1998) (quoting United States v. Plainbull , 957 F.2d 724, 725 (9th Cir. 1992) ).
II
Padilla-Diaz upheld § 1B1.10(b)(2), including its limited exception for substantial assistance departures, as consistent with both the governing statutes and constitutional requirements. 862 F.3d at 860-63. Defendants' principal argument is that we are not bound by Padilla-Diaz because the decision in that case is irreconcilable with the Supreme Court's later decision in Hughes v. United States . See Miller v. Gammie , 335 F.3d 889, 900 (9th Cir. 2003) (holding that the "issues decided by the *1132higher court" are controlling when "the relevant court of last resort ... undercut the theory or reasoning underlying the prior circuit precedent in such a way that the cases are clearly irreconcilable").
To guide our inquiry as to whether Padilla-Diaz and Hughes are reconcilable we begin by examining an earlier Supreme Court decision, Dillon , 560 U.S. 817, 130 S.Ct. 2683. Dillon set forth the framework for reviewing motions for sentence reduction and explained the role policy statements serve in § 3582(c)(2) proceedings. We then examine Padilla-Diaz and Hughes in light of Dillon .
Dillon considered whether § 1B1.10, the policy statement that ordinarily includes the prohibition on reducing a sentence to a term below the amended Guidelines range, is advisory under United States v. Booker , 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005). In Booker , the Court held that the Guidelines are advisory in sentencing proceedings and so do not trigger the Sixth Amendment issues that arise under a mandatory sentencing regime. Id. at 243-44, 125 S.Ct. 738. The defendant in Dillon contended that Booker 's reasoning as to general sentencing proceedings applies with equal force to § 3582(c)(2) sentence reduction proceedings, such that § 1B1.10 is advisory only. 560 U.S. at 825, 130 S.Ct. 2683.
Dillon , rejecting that argument, held that § 1B1.10 is binding in § 3582(c)(2) proceedings. Id. at 825-31, 130 S.Ct. 2683. The Court reasoned that "sentence-modification proceedings authorized by § 3582(c)(2) are not constitutionally compelled," and so do not implicate the Sixth Amendment concerns present in Booker . Id. at 828, 130 S.Ct. 2683. In distinguishing § 3582(c)(2) proceedings from the sentencing proceedings in Booker , Dillon emphasized that " § 3582(c)(2) represents a congressional act of lenity intended to give prisoners the benefit of later enacted adjustments to the judgments reflected in the Guidelines." Id.
The distinction Dillon drew between general sentencing proceedings and § 3582(c)(2) sentence reduction proceedings informed our holding in Padilla-Diaz. The Padilla-Diaz defendants each had been accorded downward departures or variances at their original sentencings, with the result that their terms of imprisonment were below the later-amended Guidelines range. 862 F.3d at 859. The departures or variances were not based on substantial assistance to authorities. See id. As the defendants' original sentences made them categorically ineligible for sentence reduction under § 1B1.10(b)(2)(A), the district courts refused to consider any reduction. The defendants in Padilla-Diaz raised two challenges relevant to our inquiry here.
First, the Padilla-Diaz defendants argued that U.S.S.G. § 1B1.10(b)(2)(A) conflicts with 28 U.S.C. § 991(b), the statute granting the U.S. Sentencing Commission broad authority over the promulgation of Guidelines amendments. They contended that § 991(b)(1)(B) granted the U.S. Sentencing Commission the authority to " 'establish sentencing policies and practices' that 'avoid[ ] unwarranted sentencing disparities among defendants,' " id. at 860 (quoting 28 U.S.C. § 991(b) ), and that U.S.S.G. § 1B1.10(b)(2)(A) generated such disparities by "nullif[ying] departures and variances from the [G]uideline[s] range." Id. at 861. We acknowledged in Padilla-Diaz that § 1B1.10(b)(2)(A) occasionally does lead to anomalous results but held that § 1B1.10(b)(2)(A) and § 991(b) were not in conflict. Id. Padilla-Diaz reasoned that § 991(b) was a statement of the U.S. Sentencing Commission's overall purposes and goals, not a specific directive requiring strict conformance such that *1133§ 1B1.10(b)(2)(A) could run afoul of it.4 Relying on Dillon , Padilla-Diaz also noted that a § 3582(c)(2) sentence reduction, as an act of lenity, is "not constrained" by general sentencing policies, such as maintaining uniformity and avoiding unwarranted disparities. Id. (citing Dillon , 560 U.S. at 828, 130 S.Ct. 2683 ).
Second, the defendants in Padilla-Diaz argued that § 1B1.10(b)(2)(A) violated the Fifth Amendment's guarantee of equal protection because it "irrationally den[ied] sentence reductions to offenders who received lower sentences while granting them to those who originally received higher sentences." Id. at 862. The government offered two justifications for the Guidelines policy statement's disparate treatment of the two groups of defendants: Making defendants' substantial assistance the only factor considered (1) simplifies sentence reduction proceedings, and (2) encourages defendants to cooperate with the government. Id. Acknowledging, once again, that § 1B1.10(b)(2)(A) "will sometimes produce unequal and arguably unfair results," Padilla-Diaz held that the sentence reduction limitation survived rational basis review on the basis of those two justifications. Id.
The following year, the Supreme Court decided Hughes . The question considered in Hughes was entirely different from those addressed in Padilla-Diaz .
Hughes considered for a second time an issue that had been before the Court several years earlier, in Freeman v. United States , 564 U.S. 522, 131 S.Ct. 2685, 180 L.Ed.2d 519 (2011) : Is a defendant who enters into a Federal Rule of Criminal Procedure 11(c)(1)(C) plea agreement ("Type-C agreement") eligible for § 3582(c)(2) sentence reduction upon the enactment of a retroactive amendment to the Guidelines?5 Specifically, the issue in Hughes was whether a Type-C agreement is "based on a sentencing range that has subsequently been lowered," such that a defendant is eligible for sentence reduction under § 3582(c)(2). See 138 S. Ct. at 1773 (emphasis added).6 Hughes held that a *1134"sentence imposed pursuant to a Type-C agreement is 'based on' the defendant's Guidelines range so long as that range was part of the framework the district court relied on in imposing the sentence or accepting the agreement." Id. at 1775. Hughes's original sentence was not below the amended Guidelines range, and Hughes did not consider at all the import of § 1B1.10(b)(2)(A), id. at 1774, the provision limiting sentence reductions to the lowest term recommended by the revised Guidelines range.
Our case law is clear as to the effect of intervening law on prior circuit precedent: "[W]here the reasoning or theory of our prior circuit authority is clearly irreconcilable with the reasoning or theory of intervening higher authority, a three-judge panel should consider itself bound by the later and controlling authority, and should reject the prior circuit opinion as having been effectively overruled." Gammie , 335 F.3d at 893.
Defendants contend that Padilla-Diaz and Hughes are clearly irreconcilable in two respects. First, defendants argue that Hughes rejected Padilla-Diaz 's premise that general sentencing policies do not constrain § 3582(c)(2) sentence reduction proceedings. As support for this argument, defendants point to several passages in Hughes in which the Court discussed the central purpose of the Sentencing Reform Act and two of its key sentencing policies-uniformity and avoiding unwarranted sentencing disparities.
But Hughes did not conclude that general sentencing policies constrain § 3582(c)(2) proceedings. Although Hughes referenced the sentencing goals of uniformity and avoiding unwarranted disparities, it did so primarily to highlight the sentencing disparities among courts in different federal circuits stemming from the Court's fractured opinion in Freeman . See Hughes , 138 S. Ct. at 1774-75 ; see also id. at 1779 (Sotomayor, J., concurring). Additionally, in discussing the Sentencing Reform Act's uniformity goal, Hughes highlighted that the Act's purpose was furthered by interpreting § 3582(c)(2) as applying to any type of plea agreement "based on" the Guidelines, including Type-C agreements. Id. at 1776 (majority opinion). Nothing in Hughes addressed inter-defendant sentencing uniformity more generally, much less the sentence reduction limitation at issue here. Moreover, nothing in Hughes upended the Court's statement in Dillon that § 3582(c)(2) sentence reduction proceedings are acts of lenity, see 560 U.S. at 828, 130 S.Ct. 2683, or Padilla-Diaz 's reasoning, based on Dillon , that such proceedings are therefore not ordinarily constrained by general sentencing policies, see 862 F.3d at 861.
Second, defendants contend that the relevant policy statement, § 1B1.10(b)(2)(A), conflicts with § 3582(c)(2) as interpreted in Hughes , as well as in Koons v. United States , --- U.S. ----, 138 S. Ct. 1783, 201 L.Ed.2d 93 (2018), and that Padilla-Diaz misunderstood the scope of § 3582(c)(2). Specifically, defendants interpret Hughes and Koons , as requiring sentence reduction under § 3582(c)(2) for every term of imprisonment "based on" the Guidelines and argue that policy statements, such as § 1B1.10(b)(2)(A), may not limit the reduction of sentences for otherwise statutorily eligible terms of imprisonment. That argument is unpersuasive.
For starters, the statute expressly permits the U.S. Sentencing Commission to *1135delineate sentence reduction eligibility through policy statements. Section 3582(c)(2) reads:
[I]n the case of a defendant who has been sentenced to a term of imprisonment based on a sentencing range that has subsequently been lowered by the Sentencing Commission ..., the court may reduce the term of imprisonment, after considering the factors set forth in section 3553(a) ..., if such a reduction is consistent with applicable policy statements issued by the Sentencing Commission .
(emphasis added). Given that the statute's plain text requires consideration of applicable policy statements, 18 U.S.C. § 3582(c)(2) and the Guidelines policy statement, § 1B1.10(b)(2)(A), are not in conflict. Instead, pursuant to the statutory mandate, § 3582(c)(2) and applicable policy statements work in concert to determine eligibility for sentence reduction.7 Nothing in Hughes suggests otherwise.
Defendants' invocation of Koons is as misplaced as its reliance on Hughes . The defendants in Koons did not satisfy § 3582(c)(2)'s "based on" requirement because their sentences were based on mandatory minimums and substantial assistance to authorities. They maintained that they were nonetheless eligible for sentence reduction because the applicable Guidelines policy statement, § 1B1.10(c), contemplated reductions for defendants in their position.8 Koons , 138 S. Ct. at 1790. In rejecting that argument, Koons concluded that a "policy statement cannot alter § 3582(c)(2), which applies only when a sentence was 'based on' a subsequently lowered range." Id. Koons explained that "[t]he Sentencing Commission may limit the application of its retroactive Guidelines amendments through its 'applicable policy statements.' But policy statements cannot make a defendant eligible when § 3582(c)(2) makes him ineligible." Id. (internal citations omitted) (quoting Dillon , 560 U.S. at 824-26, 130 S.Ct. 2683 ).
Defendants argue here that the inverse of the reasoning in Koons is also true-that is, policy statements cannot render a defendant ineligible if they are otherwise eligible under § 3582(c)(2)'s "based on" requirement. As noted previously, § 3582(c)(2) commands otherwise; it permits policy statements to render a defendant ineligible for sentence reduction. In other words, the statute permits a sentence reduction when both of the following conditions are true-(A) the original term was "based on" a sentencing range that is later reduced; and (B) the reduction is consistent with the U.S. Sentencing Commission's policy statements. The problem in Koons was that (A) was not true; the problem here is that (B) is not true. Again, Koons explicitly recognized the second limitation, stating that "[t]he Sentencing Commission may limit the application of its retroactive Guidelines amendments through its 'applicable policy statements.' " Id.
In sum, the intervening decision in Hughes (as well as the opinion in Koons ) is *1136not in conflict with Padilla-Diaz . We are therefore bound by Padilla-Diaz 's conclusion regarding the interplay between the Guidelines policy statement contained in § 1B1.10(b)(2) and § 3582(c)(2).
III
As Padilla-Diaz remains binding circuit precedent, defendants' various arguments on appeal are foreclosed.9 We affirm the district courts' denials of the motions for sentence reduction under § 3582(c)(2).
AFFIRMED.