Check's In The Mail: HRSA Tests A New Script For 340B

Takeaways

• HRSA is launching its first-ever pilot program to test 340B rebate models under strict, agency-controlled safeguards.
• The program shifts financial and administrative burdens back onto manufacturers, protecting covered entities from added costs.
• Stakeholders have a short window to provide input, with comments due September 8, 2025.

Background

The 340B Drug Pricing Program has long been defined by friction between pharmaceutical manufacturers and covered entities over price transparency, access, and compliance. In recent years, manufacturers have increasingly limited 340B pricing at contract pharmacies or conditioned it on data-sharing arrangements, arguing these measures are necessary to prevent diversion and duplicate discounts. Covered entities, however, see these restrictions as contrary to the statute's intent and a direct threat to patient access. One flashpoint has been the push for post-purchase rebate models—favored by some manufacturers to retain pricing control but criticized by covered entities as administratively burdensome and cash-flow disruptive.

Historically, HRSA rejected unilateral manufacturer rebate programs as inconsistent with the 340B statute's "at the time of purchase" discount framework. Yet, in the face of mounting litigation and policy deadlock, HRSA's newly announced voluntary 340B Rebate Model Pilot Program represents a calculated shift. The agency is now willing to explore a rebate structure, but under strict, HRSA-controlled criteria designed to preserve program integrity and shield covered entities from financial or operational disadvantage.

Rebate Model Program Criteria in Context

The pilot's requirements can be seen as HRSA's attempt to reclaim policy leadership over the rebate debate: allowing experimentation but stripping away the levers manufacturers previously used to tilt the terms in their favor. The criteria fall into four major categories—each crafted to address prior sources of conflict.

1. General Requirements & Stakeholder Support

Historically, manufacturers' rebate proposals shifted significant compliance and IT burdens to covered entities. HRSA's criteria reverse that dynamic:

• Exclusive Manufacturer Cost Responsibility – Manufacturers must absorb all IT platform and administrative costs. This ensures covered entities are not paying for the infrastructure needed to access their own discounts.
• 60-Day Advance Notice – Manufacturers must give covered entities 60 days' advance notice before implementing a rebate model, helping to prevent sudden rollouts that could disrupt purchasing workflows.
• Continuity of Access – Covered entities retain the ability to buy through existing 340B distribution channels, avoiding a forced migration to manufacturer-preferred wholesalers.
• Technical Support – Manufacturers must provide robust, ongoing support to help covered entities navigate new submission and reconciliation processes.
• Applicable Drugs – The pilot program is limited to the NDC-11 included on the CMS Medicare Drug Price Negotiation Selected Drug List.

2. IT/Data Submission & Reporting

One of the most contentious aspects of prior manufacturer-imposed rebate models was overbroad data demands—especially patient-level information. HRSA's criteria tighten and standardize these requirements:

• Secure IT Platform – Limits data collection to specified fields for rebate processing, with full HIPAA compliance.
• Submission Timeline – Covered entities have up to 45 days after dispensing to submit claims, mitigating the risk of lost rebates due to arbitrary short windows.
• Reconciliation – The IT platform must have the capability to provide real-time reconciliation reports for covered entities to be informed of the rebate status of submitted claims.

3. Rebate Processing Requirements

Past manufacturer programs often had vague rebate timelines and broad denial grounds, leaving covered entities uncertain about when—or if—rebates would be paid. The pilot program would now mandate:

• Clear Computation Method – Rebates must be calculated at the package or unit level, specified in advance.
• 10-Day Payment or Denial – Plan should ensure that all rebates are paid to the covered entity (or denied, with documentation in support) within 10 calendar days of data submission.
• Narrow Denial Grounds – Manufacturers cannot deny rebates based on diversion or duplicate-discount allegations; those must be pursued through audits or HRSA's ADR process, preventing denial as a punitive tool.

4. Reporting to HRSA

Finally, HRSA is inserting itself into the feedback loop with mandatory reporting on rebate volumes, processing times, and denial reasons. This transparency is a clear signal that the agency intends to monitor—and, if necessary, recalibrate—the balance of burdens between the parties during the pilot.

Timeline Snapshot

• Public Comments Due – September 8, 2025
• Manufacturer Applications – Due September 15, 2025 (max 1,000 words)
• HRSA Approvals – By October 15, 2025
• Pilot Launch – January 1, 2026 (minimum one-year duration)

Strategic Takeaways

• Manufacturers: The pilot offers a sanctioned pathway to test rebate models, but with restrictions that remove many of the leverage points from past unilateral initiatives.
• Covered Entities: This is the first chance to participate in a rebate model under HRSA's protective framework—though vigilance is still needed to track rebate timeliness, data demands, and payment accuracy.
• Both: Commenting on the proposal is critical, as the pilot's safeguards and scope could influence whether HRSA expands rebate structures beyond this narrow test group.

Conclusion

The 340B Rebate Model Pilot Program is more than a technical test—it's HRSA's attempt to reclaim control of a debate that has been fought in courtrooms and contract clauses for years. For stakeholders, the next month is a pivotal opportunity to shape the rules of engagement for what could become a permanent part of the 340B landscape.