A new chapter in the 340B Drug Pricing Program is unfolding as the Health Resources & Services Administration ("HRSA") pursues its 340B Rebate Model Pilot Program (the "Pilot Program")—a move signifying both innovation and the intensification of longstanding industry debate. After announcing the program in August, HRSA has since published several FAQs on the Pilot Program's application process and operational considerations.1 The comment period for the Pilot Program ended on September 8, 2025 and HRSA received over 1,200 comments from stakeholders.
On the same day, a bipartisan group of 163 members of Congress issued a letter to the Department of Health and Human Services ("HHS") urging them to halt—or at least reconsider—the Pilot Program.2 The lawmakers cited concerns such as:
- The rebate structure risks undermining the very purpose of the 340B Program—to stretch scarce federal resources for vulnerable populations.
- Hospitals fear manufacturers could leverage rebate denials or delays, translating into financial strain and diminished services.
- Lack of transparency on the Pilot Program, including the rushed public comment period, the reliability of IT systems for rebates, and the sufficiency of HRSA's oversight plans.
Their concerns are not theoretical: safety-net providers, especially those with thin operating margins, fear having to "float" millions in drug costs while awaiting manufacturer reimbursement. For some, the delay threatens liquidity and patient care. However, the 340B Program has been under scrutiny in the past several years due to concerns that some stakeholders may be abusing the program or not using the program as intended. The Congressional Budget Office ("CBO") recently spotlighted the 340B Program's growth, noting total drug spending climbed from $6.6 billion in 2010 to almost $44 billion in 2021.3 The growth, attributed by the CBO to market factors, hospital consolidation, and Affordable Care Act-driven expansion, surpasses broader industry trends.
On the other hand, pharmaceutical manufacturers and their trade organizations offer enthusiastic endorsements. The pharmaceutical industry sees rebates as a tool for greater transparency and for mitigating duplicate discount scenarios—an issue hospitals describe as infrequent. PhRMA, the industry's leading lobby group, via their comment on the Pilot Program, favors rapid and broad expansion of the rebate framework across all 340B drugs, touting the benefits for program integrity.4
Conversely, hospital associations, such as the American Hospital Association, have not only decried the financial risks but have gone so far as to ask the Federal Trade Commission and the Department of Justice to investigate the rebate push as anticompetitive, pointing to coordinated rebate attempts in previous years as harmful parallel conduct.5
The Essence of the 340B Rebate Model Pilot Program
The heart of the Pilot Program is to shift select drug purchases for safety-net providers from the traditional upfront discount model to a post-purchase rebate model. This framework initially applies to ten drugs designated under the Medicare Drug Price Negotiation Program ("MDPNP") for 2026, including high-profile therapeutics like Eliquis, Enbrel, Farxiga, and others.
Key Operational Features of the Pilot Program
- Participating manufacturers must detail their plans publicly, and communicate directly with 340B Covered Entities at least 60 days before launch.
- Rebates are expected to be paid within 10 days of claim submission, with delays risking pilot expulsion.
- 340B Covered Entities will order through their 340B wholesale accounts, streamlining the purchase and rebate process and ensuring the final price matches the 340B ceiling price.
Data Collection and Oversight
- Real-time claim tracking will aid reconciliation.
- Manufacturers will submit NDC-level reports, helping HRSA monitor program performance and compliance.
- The pilot may expand beyond the initial ten drugs, but only after evaluation by HRSA.
Looking Forward
With applications for Pilot Program participation closed and the launch set for January, the program's fate hangs in the balance of congressional will, administrative vigilance, and the ability of stakeholders to find common ground. HRSA's commitment to feedback and adaptability will be tested, as will the Pilot Program's efficacy in achieving its aims without burdening the safety net it was created to strengthen.
As the healthcare and legislative communities watch closely, one thing remains clear: the 340B Rebate Model Pilot Program is not just an administrative experiment, but a crucible for the future of drug discount policy in America's safety-net system.
Footnotes
1 U.S. Dep't of Health & Human Servs., Health Resources & Servs. Admin., 340B Model Pilot Program, https://www.hrsa.gov/opa/340b-model-pilot-program (September 2025).
2 Letter from Doris Matsui et al. to Secretary Robert F. Kennedy, Jr., U.S. Dep't of Health & Human Servs. (Sept. 8, 2025), https://sponsors.aha.org/rs/710-ZLL-651/images/2025-05-15_340B_Rebate_Models_Ruling (on file with author).
3 Cong. Budget Office, Growth in the 340B Drug Pricing Program (Sept. 2025), https://www.cbo.gov/system/files/2025-09/60661-340B-program.pdf.
4 Pharmaceutical Research and Manufacturers of America, Comment on Rebate Notice, Docket No HRSA–2025-0001, https://cdn.aglty.io/phrma/global/resources/import/pdfs/Rebate%20Notice%20PhRMA%20Comments_FINAL.pdf (Sept. 2025).
5 Chad Golder, General Counsel & Sec'y, Am. Hosp. Ass'n, Letter to Andrew N. Ferguson, Chairman, Fed. Trade Comm'n, & Gail Slater, Assistant Att'y Gen., Antitrust Div., U.S. Dep't of Justice (Sept. 8, 2025), https://www.aha.org/system/files/media/file/2025/09/anticompetitive-activity-by-drug-companies-with-respect-to-340b-rebate-models-letter-9-8-2025.pdf.
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