The 340B prescription drug pricing program, created more than 30 years ago to help low-income outpatients receive discounted prescription drugs, has long been a source of controversy – and the subject of a number of lawsuits in recent years.

Now, the Department of Health and Human Services is contemplating changes in the program.

HHS’s Health Resources and Services Administration has announced a 340B Rebate Model Pilot Program “… as a voluntary mechanism for qualifying drug manufacturers to effectuate the 340B ceiling price on select drugs to all covered entities, and to collect comments on the structure and application process of the 340B Rebate Model Pilot Program…”

The program would apply only to drugs on the CMS Medicare Drug Price Negotiation Selected Drug List for 2026 from qualifying manufacturers meeting specific criteria.

In recent years, several pharmaceutical companies have attempted to impose such a rebate model on their 340B customers, only to have those efforts rejected by the courts and, until recently, by HHS itself.

The hospital industry appears to be rallying against this proposal, maintaining that it would pose an administrative and financial burden while paving the way to broader use of the rebate model, which they oppose.  Learn more about hospitals’ concern about the HHS proposal from the Modern Healthcare article “340B rebate pilot tees up healthcare industry firestorm.”  (password required)

Now, HRSA is inviting certain drug manufacturers that meet its criteria to apply to participate in its rebate model for a minimum of one year.  Learn more about the program from this HRSA news release and this formal announcement.

On the administrative front, HRSA has proposed updating the enrollment and recertification forms used by entities participating in the 340B drug discount program.  The proposed changes are technical and generally minor.  Learn more about these changes from this CMS notice.

The 340B program was created by Congress in 1992 with providers like the Alliance of Safety-Net Hospitals’ community safety-net hospitals in mind:  caregivers that serve low-income communities and especially large numbers of low-income, uninsured, and underinsured patients. The program enables these hospitals, and other providers like them, to maximize their resources when working to serve their communities.  It helps improve access to high-cost prescription drugs for low-income patients and helps put additional resources into the hands of qualified providers so those providers can do more for their low-income patients:  provide more care that their patients might otherwise not be able to afford, offer more services that might otherwise be unavailable in those communities, and do more outreach into communities consisting primarily of low-income-residents.