On July 31, 2025, the Health Resources and Services Administration (HRSA), Office of Pharmacy Affairs (OPA) issued a 340B Drug Pricing Program notice (the "Notice") announcing the launch of a voluntary 340B rebate model pilot ("Pilot").
This Pilot marks a significant departure from the traditional upfront discount model that has governed the 340B Program for over three decades. Under the Pilot, participating manufacturers will provide post-sale rebates to 340B Covered Entities (i.e. hospitals and clinics), rather than offering discounted prices at the point of sale. HRSA is soliciting public comment on the structure and implementation of the Pilot, which is designed to test the feasibility of a rebate-based approach while maintaining statutory compliance under 340B. The Notice is scheduled to be published on Friday, August 1st, and public comments are due Sunday, August 31 st.
The Pilot applies only to manufacturers that have entered into MDPNP agreements with CMS for the 2026 applicability year. Participation is limited to drugs listed on CMS's Medicare Drug Price Negotiation Selected Drug List. Notably, manufacturers may not implement any rebate model without prior HRSA approval, and the agency reserves the right to revoke participation for noncompliance.
The Pilot may help address long standing concerns manufacturers have had with Covered Entity 340B compliance. By shifting to a rebate model, HRSA aims to facilitate more precise tracking of 340B claims, potentially reducing the risk of duplicate discounts involving Medicaid and the Maximum Fair Price (MFP) under the Medicare Drug Price Negotiation Program (MDPNP). Additionally, the post-sale rebate structure may offer manufacturers greater visibility into dispensing patterns, helping to mitigate concerns about product diversion to non-340B eligible patients. While the Pilot is limited in scope, HRSA has indicated that it may consider expanding the model based on stakeholder feedback and data collected during the initial implementation period.
Pilot Program Details
The Pilot outlines four categories of criteria that participating manufacturers must meet for their pilot model to be approved:
- General Requirements. The proposed Pilot must: (a) assure all costs associated with the rebate model are borne by the manufacturer, including any costs of data submission through any IT platform, with no costs passed on to Covered Entities; (b) provide 60 days' notice to Covered Entities before implementation of any rebate model; (c) allow Covered Entities to order MFP drugs under existing distribution mechanisms; (d) provide technical and customer assistance to Covered Entities; (e) ensure any IT platform secures all data and limits data to only that which is necessary to effectuate rebates; and (f) ensure any IT platform protects patient identifying information consistent with data privacy and security laws.
- Reporting Requirements. The proposed Pilot must: (a) provide Covered Entities up to 45 calendar days from the date of dispense to submit data, with allowances for exceptions; (b) ensure the IT platform has the capability to filter and use only the required data to effectuate the rebate; (c) ensure the IT platform can provide real-time reconciliation reports to Covered Entities on the status of any rebate; and (d) provide OPA with reports on the Pilot, including data on purchases provided through rebates and claim delays and denials.
- Rebate Rules. The proposed Pilot must: (a) specify whether rebates are paid at the package or unit level; (b) ensure that all rebates will be paid within 10 calendar days of data submission; (c) ensure that rebates are not denied based on compliance concerns with diversion or duplicate discounts (which must be resolved through OPA or the existing 340B statutory mechanisms) and any denials of claims are accompanied by rationale and specific documentation; and (d) ensure rebates are only paid on sales of MDPNP drugs.
- Data. All data requested by the manufacturer under the proposed Pilot to effectuate the rebate must be limited to readily available pharmacy claim fields, which are set forth in the Notice.
While the Pilot Program is limited to MFP drugs, this program could be replicated and extended to apply to all 340B covered drugs. Manufacturers who have advocated for a rebate model posit that rebate models will assure greater transparency because they will be able to openly track the drugs sold at 340B discounts and use that data provided in connection with rebates to dispute duplication and diversion of discounts.
Manufacturers interested in participating in the Pilot Program must submit their plans to HRSA by September 15, 2025. HRSA will review these submissions and notify manufacturers of approval decisions by October 15, 2025. Approved rebate models may then go into effect starting January 1, 2026, but only after formal approval is granted in accordance with 340B Program statutory requirements.
For additional information and background on the 340B Program, see our previous alerts: Federal Court Affirms HRSA Authority to Preapprove 340B Rebate Models but Urges HRSA to Reconsider Rejection of Rebate Model and Significant 340B Drug Pricing Program Litigation May Impact 340B Scope.
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