Only a week after a federal court rejected for a second time its attempt to introduce a new approach to administering the 340B Drug Pricing Program, the Health Resources and Services Administration is going back to the drawing board and trying again to launch the model.

In its first step, HRSA has issued a Request for Information (RFI) to gather input from interested parties on whether the agency should implement a rebate model under the 340B program and how best to implement such a model.  The RFI notes that in 2024, HRSA began receiving inquiries from drug companies seeking to implement different rebate models for the 340B program and that last August the agency published a notice inviting pharmaceutical companies to voluntarily participate in a proposed “340B Rebate Model Pilot Program.”  Until that time, the program did not employ rebates; instead, 340B-eligible providers received discounts for the prescription drugs they purchased for their patients.

Eligible providers filed suit to enjoin implementation of the rebate pilot, and after two setbacks in federal court, HRSA announced that it would cease pursuing implementation of its August proposal.

Now, only a week after this setback, HRSA is requesting comments from stakeholders to further evaluate the potential costs and benefits of a rebate model.  HRSA seeks comments on a range of issues, including:

• administrative, operational, financial, and medication access concerns in connection with rebate models;
• eligible providers’ desire to continue obtaining 340B ceiling prices through upfront discounts and whether that expectation is reasonable in light of the Secretary of Health and Human Services’ expressed statutory authority to provide for discounts via “rebate or discount;”
• the potential impact on providers’ cash flow; and
• proposed alternatives and scope-limiting measures to inform a rebate pilot design.

HRSA also seeks comments on costs for covered entities; payment timing and potential cash flow effects for covered entities; rebate denials; data collection by covered entities; manufacturer efforts to avoid duplicate discounts; required reporting; 340B program integrity, and other potential benefits of a rebate pilot.

The 340B Drug Pricing Program was established in 1992 and requires drug companies to provide outpatient drugs at significantly reduced prices to eligible providers, such as safety-net hospitals, clinics, and health centers serving high-risk or low-income, uninsured populations.  It is not taxpayer-funded but acts as a rebate-driven, cost-reduction mechanism, helping participating providers stretch limited resources to expand care and services.

Community safety-net hospitals have a special stake in the 340B program and are wary of any changes that might jeopardize the program’s effectiveness and its value both to those hospitals and to their patients.  340B is a vital part of community safety-net hospitals’ overall approach to serving the low-income residents of the communities in which they  are located, enabling those hospitals to provide prescription drugs to patients who otherwise could not afford them.  The program also generates savings that community safety-net hospitals reinvest in services for the low-income, underinsured, and uninsured residents of their communities.

Learn more about the events that led to the issuance of this RFI, the issues for which HRSA seeks stakeholder input through the RFI, and how to submit comments from this HRSA notice and about the implications of HRSA issuing this RFI almost immediately after the courts rejected its previous effort to launch a new 340B model from the Fierce Healthcare article “Trump administration restarts its efforts to pilot 340B rebates.”