Prepare for 2027: HRSA Advances Revised 340B Rebate Pilot Program
August 20, 2026
On August 3, 2026, the Health Resources and Services Administration (HRSA) published notice of its revised 340B Rebate Model Pilot Program, which would permit participating drug manufacturers to provide 340B discounts through post-dispense rebates rather than traditional upfront discounts for a limited set of drugs, a significant and costly change to the program. In this form, the pilot program applies to drugs selected under the Medicare Drug Price Negotiation Program for initial price applicability years 2026 and 2027, and participating manufacturers must submit applications to HRSA by August 24, 2026. If approved, the rebate model will become effective January 1, 2027.
This proposal marks HRSA’s second attempt to implement a 340B rebate model. In 2025, HRSA approved a similar pilot program, but implementation was halted after covered entity stakeholders successfully challenged the initiative in federal court. The nationwide injunction and subsequent vacatur in early 2026 were based on procedural deficiencies, including HRSA’s failure to adequately address public comments before implementing the pilot. In response, HRSA conducted a new Request for Information, reviewed more than 2,400 stakeholder comments, and has now issued a revised proposal. As a result, while additional litigation is possible, HRSA appears to have taken steps to strengthen the procedural foundation for the revised pilot.
Under the revised proposal, participating manufacturers would no longer provide traditional upfront 340B pricing for covered drugs. Instead, covered entities would purchase affected drugs through existing distribution channels at wholesale acquisition cost (WAC) and submit claims-level data to obtain a manufacturer rebate equal to the difference between WAC and the 340B ceiling price.
HRSA received extensive opposition from covered entities, which largely focused on increased administrative burden, cash-flow disruption, operational complexity, data privacy concerns, and patient-access implications. HRSA has attempted to mitigate such concerns by limiting the pilot to Medicare Drug Price Negotiation Program selected drugs, restricting the data elements manufacturers may collect, requiring manufacturers to fund the rebate-processing platform, permitting use of existing purchasing channels, requiring rebates to be paid within ten calendar days of a complete submission, and prohibiting manufacturers from denying rebates based solely on suspected diversion or duplicate-discount concerns. HRSA also rejected substantive objections, reasoning that the rebate model is necessary to improve program integrity, prevent duplicate discounts, and coordinate 340B pricing with the Medicare Drug Price Negotiation Program.
If you have questions regarding the proposed rebate model, its operational impact on your organization, or broader 340B compliance requirements, please contact Brandon W. Shirley or any member of Krieg DeVault's 340B and healthcare regulatory team.
Disclaimer: The contents of this article should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult with counsel concerning your situation and specific legal questions you may have.
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August 20, 2026
On August 3, 2026, the Health Resources and Services Administration (HRSA) published notice of its revised 340B Rebate Model Pilot Program, which would permit participating drug manufacturers to provide 340B discounts through post-dispense rebates rather than traditional upfront discounts for a limited set of drugs, a significant and costly change to the program. In this form, the pilot program applies to drugs selected under the Medicare Drug Price Negotiation Program for initial price applicability years 2026 and 2027, and participating manufacturers must submit applications to HRSA by August 24, 2026. If approved, the rebate model will become effective January 1, 2027.
This proposal marks HRSA’s second attempt to implement a 340B rebate model. In 2025, HRSA approved a similar pilot program, but implementation was halted after covered entity stakeholders successfully challenged the initiative in federal court. The nationwide injunction and subsequent vacatur in early 2026 were based on procedural deficiencies, including HRSA’s failure to adequately address public comments before implementing the pilot. In response, HRSA conducted a new Request for Information, reviewed more than 2,400 stakeholder comments, and has now issued a revised proposal. As a result, while additional litigation is possible, HRSA appears to have taken steps to strengthen the procedural foundation for the revised pilot.
Under the revised proposal, participating manufacturers would no longer provide traditional upfront 340B pricing for covered drugs. Instead, covered entities would purchase affected drugs through existing distribution channels at wholesale acquisition cost (WAC) and submit claims-level data to obtain a manufacturer rebate equal to the difference between WAC and the 340B ceiling price.
HRSA received extensive opposition from covered entities, which largely focused on increased administrative burden, cash-flow disruption, operational complexity, data privacy concerns, and patient-access implications. HRSA has attempted to mitigate such concerns by limiting the pilot to Medicare Drug Price Negotiation Program selected drugs, restricting the data elements manufacturers may collect, requiring manufacturers to fund the rebate-processing platform, permitting use of existing purchasing channels, requiring rebates to be paid within ten calendar days of a complete submission, and prohibiting manufacturers from denying rebates based solely on suspected diversion or duplicate-discount concerns. HRSA also rejected substantive objections, reasoning that the rebate model is necessary to improve program integrity, prevent duplicate discounts, and coordinate 340B pricing with the Medicare Drug Price Negotiation Program.
If you have questions regarding the proposed rebate model, its operational impact on your organization, or broader 340B compliance requirements, please contact Brandon W. Shirley or any member of Krieg DeVault's 340B and healthcare regulatory team.
Disclaimer: The contents of this article should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult with counsel concerning your situation and specific legal questions you may have.