340B pilot program pause: Providers can help reshape next steps
The 340B rebate pilot program, which aims to change how providers receive drug discounts, is on pause. Providers have a critical opportunity to weigh in on whether a rebate-based model makes sense, and how it could affect cash flow, operations and implementation.
How we got here
Under the existing 340B Drug Pricing Program, drug manufacturers must offer outpatient medications at significantly discounted prices to eligible health care organizations, including those that serve vulnerable patient populations. According to the Health Resources and Services Administration (HRSA), 340B-covered entities purchased $81.4 billion in outpatient drugs in 2024.
The 340B rebate pilot program was originally set to begin Jan. 1. Under this pilot, pharmaceutical manufacturers would issue rebates to safety‑net providers instead of offering upfront discounted drug prices. The pilot program required covered entities to pay full list price at the time of purchase and later submit detailed claims data to a rebate platform after dispensing eligible drugs. Manufacturers generally supported the rebate model because it would provide deeper visibility into how providers use 340B drugs, helping to prevent duplicate 340B–Medicaid discounts and strengthen their oversight through the 340B audit process.
But the pilot was met with challenges given the increased administrative burden to providers, as well as potential cash-flow challenges to providers while awaiting reimbursement through manufacturer rebate payments. Just days before the Jan. 1 start date, the program was paused and remains on hold, facing necessary modifications.
What’s next?
HRSA has now issued a request for information (RFI) asking stakeholders whether it should pursue a rebate-based model for the 340B program and how such a model should be structured. The agency is seeking detailed feedback on the potential impact to providers, manufacturers, pharmacies and other stakeholders including administrative and operational burdens, staffing and resource implications and information technology and system requirements needed to support a rebate program.
HRSA is also soliciting comments on how a rebate model could affect provider cash flow, and notes that a future model may include parameters governing when manufacturers can deny rebate claims. Comments on the RFI are due March 19. Providers and stakeholders have a rare window to influence whether a rebate-based model is viable.
Learn more about what’s happening in health care in our industry outlook.
