On August 1, 2025, the Health Resources and Services Administration (HRSA) issued a new pilot initiative under the 340B Drug Pricing Program that may significantly reshape longstanding pricing and discount frameworks. The 340B Rebate Model Pilot Program (the Pilot) will allow participating drug manufacturers to offer post-sale, rebates to eligible 340B Covered Entities (CEs) for select drugs, rather than providing upfront discounts. This change would require CEs to purchase medications at traditionally higher acquisition cost prices and seek rebates after the fact.
This post-sale Pilot, however, introduces potentially significant operational and compliance considerations for both manufacturers navigating CMS’s Medicare Drug Price Negotiation Program (MDPNP) requirements and for CEs managing rebate workflows and financial reporting. Additionally, the changes may negatively impact CEs’ cash flow due to paying full acquisition costs up front, which could strain budgets and alter purchasing strategies. The transition may also require CEs to evaluate whether existing systems, internal controls, and contract terms are adequate to handle a post-sale rebate structure.
Other Key Pilot Details:
- The rebate model will only apply to drugs selected under the MDPNP for the 2026 applicability year.
- Under the Pilot, CEs will pay standard acquisition costs upfront and then receive rebates equivalent to the difference between that cost and the 340B ceiling price. At the same time, participating manufacturers must ensure that CEs are not burdened with any additional administrative costs.
- Rebates must be paid, or denied, with appropriate documentation, within ten (10) calendar days of data submission.
- CEs will continue to have access to their current distribution channels and will receive sixty (60) days’ notice prior to the implementation of the Pilot.
HRSA is soliciting public comment on the Pilot’s structure, including potential burdens and safeguards for CEs. Click here for more information and submission guidelines. All comments must be submitted through www.regulations.gov by September 8, 2025.
For assistance evaluating the impact of this Pilot program or drafting comments, please contact the authors, the Garfunkel Wild attorney with whom you regularly work, or contact us at [email protected].
