HHS Pilot Program to Evaluate 340B Drug Pricing Program Rebate Models
The Health Resources and Services Administration ("HRSA") plans to implement a limited pilot program that will allow approved manufacturers to issue post-purchase rebates for 340B covered outpatient drugs rather than upfront discounts.
On August 1, 2025, HRSA announced it is inviting certain drug manufacturers to apply for participation in a voluntary 340B Rebate Model Pilot Program. Unlike an upfront discount model, where covered entities participating in the 340B program are charged only the discounted price on eligible outpatient drugs, the rebate model that will be the subject of the pilot will effectuate the 340B discount through a post-purchase rebate equal to the difference between the purchase price and the 340B ceiling price (subject to the submission of required data).
The Department of Health and Human Services' ("HHS") Office of Pharmacy Affairs ("OPA") is only inviting drug manufacturers that meet specified criteria to apply to participate in the pilot program. Currently, only manufacturers with Medicare Drug Price Negotiation Program ("MDPNP") Agreements in place with the Centers for Medicare & Medicaid Services for the initial price applicability year 2026 are eligible to apply for and participate in the pilot program. Manufacturers who choose to participate must do so for at least one year.
As stated in HRSA's announcement, manufacturers will need to satisfy several requirements to be considered for participation in the pilot program, including that they must:
- Pay all costs for data submission through an information technology ("IT)" platform and ensure data is secure.
- Give 60 days' notice to covered entities before implementing the model.
- Allow covered entities to submit and report data for up to 45 days from date of dispense, with exceptions and adjustments.
- Ensure the IT platform generates real-time reconciliation reports.
- Ensure rebates are paid within 10 calendar days of data submission and are not denied based on compliance concerns with diversion or Medicaid duplicate discounts or without explanation.
OPA has indicated it will consider manufacturer evaluations of the pilot program's effectiveness in addition to covered entity and other stakeholder feedback when evaluating the pilot and determining next steps.
The deadline to submit public comments is September 8, 2025. According to HRSA, rebate models "could fundamentally shift how the 340B program has operated for over 30 years." Stakeholders should thus closely monitor developments in this area, which is also the focus of multiple pending lawsuits.
