The Countdown to 340B Rebates Is Back On

A federal plan to impose a new 340B rebate system for 18 drugs starting in January is taking shape, providing more details about how rebates could increase financial pressures and administrative burdens for hospitals. But hospital associations are pushing back against the plan. 340B Health Vice President of Legal and Policy Amanda Nagrotsky fills us in on the latest.

How a 340B Rebate Plan Would Affect Hospitals and Patients

A 340B rebate model would fundamentally change how hospitals obtain discounts on qualifying medications. Currently, hospitals receive upfront discounts built into the prices of medications they purchase through 340B. Under a rebate, hospitals would have to front the full cost of medications, submit claims, track and reconcile rebate payments, and address delays and denials. Nagrotsky says this all adds up to significant new costs to hospitals’ bottom lines.

“Déjà Vu” As HRSA Moves Forward Again on Rebates

If discussions about a mandated 340B rebate plan sound familiar, that’s because they are. The Health Services & Resources Administration (HRSA) had finalized a rebate program for 10 drugs to take effect Jan. 1, 2026. But a lawsuit and federal court decisions in late 2025 put a stop to the program before it began. The court agreed HRSA failed to properly assess the costs of rebates on 340B providers and to provide a rationale for changing the upfront discount model. HRSA withdrew the first program completely but issued a request for a new rebate program for 2027 and issued a final notice about it in July.

Hospital Associations Pushing Back Again

In October, the American Hospital Association, Maine Hospital Association, and four individual hospitals filed a lawsuit against HRSA challenging the new rebate model, arguing the federal government has failed to address any of the legal deficiencies from its previous attempt. 340B Health has filed an amicus brief in support of the hospital plaintiffs in this case. As the court case plays out, Nagrotsky says it is important that hospitals project how the new 340B rebate plan would affect their finances and implement a plan for navigating the rebate submission process.

Resources:

1. 340B Health Files Court Brief Supporting Lawsuit To Block 340B Rebates
2. Brief Your Hospital Leadership on the Status of the 340B Rebate Program