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News
The federal government has named 10 drugmakers and 21 drugs for its revamped 340B Rebate Model Pilot Program, set to launch January 1. The pilot swaps upfront drug discounts for after-the-fact rebates, a shift that major hospital groups say will pile on administrative costs and financial strain. This is HRSA's second attempt after a judge blocked the first version earlier this year.
The Health Resources and Services Administration (HRSA) has officially named 10 pharmaceutical companies — including Pfizer, AbbVie, Merck, and AstraZeneca — and 21 drugs that will participate in its revised 340B Rebate Model Pilot Program, launching January 1. The pilot replaces the traditional upfront drug discounts for safety-net providers with back-end rebates coordinated by the manufacturers themselves. Providers will have up to 45 days after dispensing a drug to submit claims-level data through an IT platform called Beacon before receiving their discounts.
This is HRSA's second attempt at the pilot — the first was blocked by a federal judge following lawsuits from hospital groups. The revised version is broader, covering 21 drugs compared to 14 in the original, and includes new entrants like GlaxoSmithKline, Pfizer, Astellas Pharma, and Teva. Drugmakers argue the shift will curb fraud and double-dipping on discounts; hospitals counter that the concerns are overblown and the new model will create over $1 billion in collective administrative costs.
By the Numbers:
Why it matters: The 340B program provides critical drug discounts to hospitals and clinics serving vulnerable populations. Shifting to a rebate model changes the cash flow dynamics for already financially strained safety-net providers — and with the American Hospital Association signaling it's "considering all available options," another legal challenge may be on the horizon.
