In late 2025, covered entities were preparing for potentially dramatic changes with the introduction of a 340B rebate model. However, after legal challenges halted the implementation of this proposed pilot program, the U.S. Department of Health and Human Services (HHS) has now shifted course, opting to gather stakeholder input through a Request for Information (RFI).
This shift marks a pivotal moment in the ongoing debate over whether rebates should be used, after a big win for covered entities when the program was initially paused.
Why the Rebate Model was Paused
In August 2025, HHS’s agency responsible for overseeing the 340B Program, the Health Resources and Services Administration (HRSA), announced a 340B Rebate Model Pilot Program. The proposal was designed to allow participating drug manufacturers to provide 340B discounts as post-purchase rebates instead of traditional point-of-sale discounts.
Under this model, covered entities would pay full Wholesale Acquisition Cost (WAC) at the time of purchase and later submit claims to manufacturers for rebates that would bring the net price down to the 340B ceiling.
However, significant opposition from hospital associations and other safety-net providers culminated in legal action. In late 2025, a federal court halted the pilot before implementation, finding that HRSA had not adequately considered the administrative burdens and interests of long-standing 340B participants.
Following the ruling, HRSA formally paused the implementation, with commentary that “manufacturers who were approved for participation in the pilot to effectuate 340B pricing through a rebate mechanism will now be required to continue to offer all of their covered outpatient drugs to 340B covered entities at the 340B ceiling price as an up-front discount.”
HRSA’s New Request for Information
On February 13, 2026, HHS issued a new RFI inviting public comments on whether and how a 340B rebate model could be implemented in the future. This marks a reset of the policy process, rather than an abandonment of the concept entirely.
The RFI is designed to help HRSA better understand the impact of rebate-based pricing on covered entities, manufacturers, and patients. It seeks detailed input on a wide range of topics, including:
- Operational costs and administrative burden of administering rebate models
- Cash-flow impacts, including whether delayed rebates could strain provider finances
- Rebate denials and reimbursement challenges
- Data and reporting requirements, and how they could differ from current systems
- Program integrity concerns, such as preventing duplicate discounts
- Standards and procedures for evaluating and approving manufacturer rebate plans
HRSA is encouraging commenters to support their answers with facts, research, and evidence, a reflection of the agency’s effort to build a more robust administrative record than it did during the initial pilot attempt.
What This Means for Covered Entities
The transition from an upfront discount to a post-purchase rebate fundamentally shifts how 340B savings are realized. Under the existing statutory framework, manufacturers provide discounted prices at the time of sale. Moving to a rebate model means providers could face:
- Temporary financing requirements, as they would pay full price upfront
- Delays in realizing savings, which could affect budgets for patient care programs
- Increased administrative complexity, including claims submissions and reconciliations
- Uncertainty around denied rebates and appeals processes
These concerns were central in the legal challenge against the original pilot, particularly among safety-net hospitals and community providers that rely heavily on predictable 340B savings to support uncompensated care and community services.
What’s Next?
Comments for the RFI are due March 19, 2026, and this feedback will inform HRSA’s decision on whether to develop a formal proposal for a new pilot or alternative approach.
For covered entities, manufacturers, state associations, and advocacy groups, submitting detailed, evidence-based responses is an opportunity to influence the future structure of the 340B Program and ensure that any changes preserve the program’s core mission: expanding access to affordable medications for vulnerable patients.
If your organization is evaluating how this potential shift could affect operations, cash flow, or compliance, we’re here to help. Schedule time to meet with our team here.
For information on how to submit comments, please visit the Federal Register here: https://www.federalregister.gov/documents/2026/02/17/2026-03042/request-for-information-340b-rebate-model-pilot-program
Sources used
- “HHS Releases RFI on New 340B Rebate Model” (American Hospital Association)
https://www.aha.org/news/headline/2026-02-13-hhs-releases-rfi-new-340b-rebate-model - “HRSA Pauses 340B Rebate Model Pilot Program Following Federal Court Order” (Feldesman Tucker Leifer Fidell LLP)
https://www.feldesman.com/hrsa-pauses-340b-rebate-model-pilot-program-following-federal-court-order/ - “Request for Information: 340B Rebate Model Pilot Program” (Federal Register) https://www.federalregister.gov/documents/2026/02/17/2026-03042/request-for-information-340b-rebate-model-pilot-program
