What HRSA’s Revised 340B Rebate Pilot Means for Contract Pharmacies, Health Systems and FQHCs
On October 1, HRSA disclosed that ten manufacturers had received approval to participate in the revised 340B Rebate Model Pilot Program. The approved plans cover 21 drugs, and the program is scheduled to begin January 1, 2027.
The HRSA pilot page now lists the participating manufacturers, covered drugs, technology platforms and implementation requirements. The pilot will use rebates instead of upfront discounts for a limited group of drugs connected to the Medicare Drug Price Negotiation Program.
That change matters to covered entities, health systems, federally qualified health centers and contract pharmacies because it affects purchasing, claims data, reimbursement timing and compliance responsibilities.
This is a second attempt
The revised pilot follows an earlier effort that was scheduled to begin January 1, 2026.
Covered-entity stakeholders, including the American Hospital Association, challenged the original program under the Administrative Procedure Act. The U.S. District Court for the District of Maine issued a nationwide preliminary injunction on December 29, 2025. The First Circuit declined to stay that order, HHS withdrew the original pilot, and the Maine court later vacated and remanded the original notices and manufacturer approvals.
HRSA’s revised program is therefore a new and contested approach, not a simple restart. On October 1, the AHA said it was considering all available options to stop the revised pilot. That statement does not establish that a new lawsuit has been filed, though further litigation and congressional action remain possible.
The D.C. Circuit’s decision in Novartis Pharmaceuticals Corp. v. Kennedy confirms that Section 340B permits rebate models and that manufacturers may not implement them without HHS approval. The court did not decide that every possible rebate model would comply with the statute.
The pilot is narrower than the program as a whole
The pilot does not apply to every 340B drug.
HRSA limits it to the NDC-11s of drugs appearing on the CMS Medicare Drug Price Negotiation Selected Drug Lists for initial price applicability years 2026 and 2027, and only during the applicable price periods.
HRSA estimated that the eligible universe represented less than 5.5% of total 340B sales. The final approved plans cover 21 drugs, so the share actually affected by the pilot may be smaller than the initial estimate. The remaining 94.5% of 340B sales is expected to remain under the upfront-discount model in 2027.
The broader $100 billion figure describes total 340B purchases, not the size of the rebate pilot. Program-wide specialty-pharmacy and covered-entity statistics should not be presented as though they describe the pilot’s reach.
What changes for covered entities
For affected drugs, covered entities may need to purchase through existing distribution channels at the wholesale acquisition cost and then submit claims data to receive the 340B rebate.
The approved plans must provide:
At least 90 calendar days’ notice before implementation.
At least 45 calendar days from the date of dispense to submit required data.
Payment of the rebate, or a documented denial, within 10 calendar days after a completed submission.
A 15-calendar-day transition grace period for up to two unreplenished accumulated packages dispensed before the effective date, provided the rebate request is still submitted within the 45-day period.
The 90-day notice period should be underway now for plans intended to take effect January 1, 2027. Covered entities should confirm when each manufacturer delivered its notice and whether the notice explains the required registration and data-submission process.
The approved plans also require manufacturers to identify the technology platform used for submissions, pay the platform’s costs, provide claim-status information and document the reasons for denied rebates.
The ten-day payment clock begins only after a completed submission. If a submission is returned as incomplete, the clock restarts when the missing information is provided. That makes the process for correcting incomplete claims an important operational issue.
The cash-flow issue needs a balanced assessment
The rebate model may require some entities to order selected drugs at WAC rather than receiving the 340B discount at the point of purchase.
HRSA expects the cash-flow effect to be limited because, in most cases, payment to wholesalers should occur after the manufacturer rebate is received. The pilot also uses unit-level rebate processing and includes transition accommodations intended to reduce inventory disruption.
That expectation may not hold equally for every entity. Cash-flow exposure will depend on wholesaler payment terms, claim-submission speed, incomplete data, denials, credit arrangements and the entity’s ability to reconcile claims promptly.
Covered entities should model the timing by drug, manufacturer, dispensing channel and contract-pharmacy arrangement rather than assume that the financial effect will be either insignificant or severe.
What executives should do now
Health systems, FQHCs and contract pharmacies should:
Identify the affected NDC-11s and determine which dispensing channels are involved.
Assign responsibility for claim submission, reconciliation, corrections and denial appeals.
Confirm that pharmacy, wholesaler, TPA and 340B software systems can produce the required data.
Test the 45-day submission window and ten-day payment timetable.
Review wholesaler credit terms and model exposure during delayed, incomplete or denied claims.
Confirm whether the manufacturer’s 90-day notice has been delivered and whether platform registration is required.
Track the 15-day transition rule for unreplenished inventory.
Document how the new process affects patient access, inventory and reimbursement.
How Lanton, Lanton & Sosa Law PLLC can help
Lanton, Lanton & Sosa Law PLLC advises healthcare organizations, pharmacies and life-sciences companies on 340B, reimbursement, regulatory compliance and government affairs.
For this pilot, that work may include reviewing manufacturer and contract-pharmacy arrangements, assigning legal and operational responsibilities, evaluating claims and data requirements, assessing denial and dispute procedures, modeling reimbursement exposure and preparing for agency or manufacturer inquiries.
The revised pilot is limited in scope, yet it introduces a new payment and data process into a program that serves thousands of covered entities. The entities that prepare early will be better positioned to identify errors, protect reimbursement and maintain access for patients.