HHS announces revised 340B Rebate Model Pilot Program; see AHA’s statement shared with media
The Department of Health and Human Services today issued a notice announcing a revised 340B Rebate Model Pilot Program, allowing qualifying drug manufacturers to use rebates rather than upfront discounts to effectuate the 340B ceiling price for certain drugs purchased by 340B covered entities.
In a statement shared with the media, AHA President and CEO Rick Pollack said, “The AHA is deeply concerned that HHS has chosen to move forward with a 340B Rebate Model Program despite the overwhelming evidence that it will impose massive new administrative and financial burdens on hospitals that serve America’s most vulnerable patients. The agency’s analysis dramatically understates the true costs of this program, ignoring the hundreds of millions of dollars in compliance expenses, cash-flow disruptions, and operational burdens that will inevitably divert scarce resources away from patient care. At a time when many hospitals are already under severe financial strain, this policy will force hospitals in rural and other underserved communities to spend more on bureaucracy and less on the services and care that patients depend on every day. As we continue to review today’s notice, the AHA is considering all available options to prevent this flawed program from going into effect.”
HHS’ Health Resources and Services Administration said the pilot is designed to test a rebate-based approach for a set of drugs while gathering information on program integrity, operational impacts and the interaction between the 340B program and Medicare’s Drug Price Negotiation Program. The pilot is limited to drugs included on the Centers for Medicare & Medicaid Services Medicare Drug Price Negotiation Selected Drug Lists for initial price applicability years 2026 and 2027.
Under the notice, manufacturers that wish to participate must submit plans to HRSA by Aug. 24. HRSA said it will make approval decisions by Sept. 24, and approved rebate models will take effect Jan. 1, 2027. Participating manufacturers must commit to the pilot for at least one year.
The revised pilot follows HRSA’s February request for information seeking stakeholder feedback on rebate models. The AHA and hundreds of hospitals commented on the RFI, expressing concerns to the agency. In today’s notice, HRSA responds to several comments on the RFI.
It also comes after a federal district court ruled in favor of the AHA and hospitals, vacating the agency’s original 2025 rebate pilot program and related manufacturer approvals.