The Health Resources and Services Administration has announced a revised 340B Rebate Model Pilot Program, set to take effect on January 1, 2027, replacing an earlier version struck down by a federal court.
The announcement, made on July 31, 2026, introduces a rebate mechanism allowing qualifying manufacturers to provide the 340B ceiling price through post-purchase rebates rather than traditional upfront discounts.
The revised programme, known as the 2026 Pilot, is limited to drugs selected for negotiation under Medicare and is open to manufacturers that submit qualifying plans meeting specific criteria.
HRSA said the 2026 Pilot follows extensive stakeholder engagement, including a February 2026 request for information that generated more than 2,400 public comments from hospitals, health centres, manufacturers, pharmacies, and patient advocates.
The revised pilot directly addresses Administrative Procedure Act violations cited by a federal district court that vacated HRSA’s earlier 2025 Pilot, adding procedural safeguards including notice requirements, dispute resolution pathways, and resubmission rights.
The 2025 Pilot had been challenged in court on December 1, 2025, when hospitals and hospital associations sued HRSA and the Department of Health and Human Services, arguing the programme was issued without adequate warning or consideration of costs to hospitals.
On December 29, 2025, the U.S. District Court for the District of Maine enjoined the government from implementing the 2025 Pilot, with the U.S. Court of Appeals for the First Circuit subsequently denying a stay of that injunction.
The earlier programme was formally vacated and remanded by court order on February 10, 2026, clearing the way for HRSA to develop the revised framework now being introduced.
Under a rebate model, a covered entity purchases a drug at standard acquisition cost and then submits claim data to receive a post-purchase rebate reflecting the difference between the higher initial price and the 340B discounted price.
The 2026 Pilot expands the scope of covered drugs to include Medicare Drug Price Negotiation selected drugs for both initial price applicability years 2026 and 2027, compared to only 2026 under the previous pilot.
Key changes include extending the advance notice period from 60 to 90 calendar days before implementation and requiring Office of Pharmacy Affairs review and approval for any changes to an approved manufacturer plan.
Payment requirements have been strengthened, with rebates now mandatory at the unit level using 11-digit national drug codes, removing the manufacturer discretion that existed under the 2025 framework.
HRSA has also introduced new enforcement mechanisms, allowing the agency to remove manufacturers from the pilot if they delay more than five percent of transactions without justification or deny more than five percent of claims without acceptable rationale.
A new 15-calendar-day grace period has been introduced for up to two unreplenished accumulated packages dispensed before the pilot’s effective date, addressing cash-flow concerns raised by covered entities during the public comment period.
Data privacy protections have been substantially expanded, with the 2026 Pilot now specifying that automated deidentification can occur before data ingestion, ensuring manufacturers and technology vendors never receive Protected Health Information.
Manufacturers are required to bear all information technology platform costs and are prohibited from passing any administrative fees or costs of running the rebate model onto covered entities.
The 2026 Pilot also introduces a quarterly 340B price file requirement for each 11-digit national drug code, enabling covered entities to accurately account for actual acquisition costs for Medicaid billing and patient cost-sharing purposes.
Eligible manufacturers have until August 24, 2026, to submit rebate plans to HRSA, with the deadline for approval set at September 24, 2026, and plans becoming effective on January 1, 2027.
An evaluation report on the pilot’s effectiveness is expected to be published by April 30, 2028, with aggregate non-confidential data to be made public throughout the programme’s minimum one-year duration.