The Health Resources and Services Administration has approved eight pharmaceutical companies to participate in the 340B Rebate Model Pilot Program, marking a significant shift in how certain drugs will be priced under the federal discount program. The pilot program, set to launch January 1, 2025, will include nine drugs from major manufacturers and represents HRSA's response to ongoing legal challenges over rebate model implementation.
Program Structure and Requirements
Under the approved pilot program, covered entities must continue purchasing drugs through their 340B wholesaler accounts while ensuring rebate requests are limited to drugs dispensed to 340B-eligible patients. HRSA specified that manufacturers must collaborate with distributor partners to load wholesale acquisition cost pricing in 340B wholesaler accounts, enabling covered entities to obtain rebates after purchases.
"Manufacturers should subsequently work with their distributors to obtain necessary data from the 340B wholesaler account to monitor purchases in that account," HRSA stated. The agency emphasized that both covered entities and manufacturers must maintain auditable records for purchases made under the pilot program, with HRSA continuing to audit compliance with statutory requirements.
Approved Drugs and Companies
The pilot program includes nine drugs from eight approved manufacturers:
- Bristol Myers Squibb: Eliquis
- Immunex Corporation: Enbrel
- AstraZeneca AB: Farxiga
- Pharmacyclics: Imbruvica
- Merck Sharp Dohme: Januvia
- Boehringer Ingelheim: Jardiance
- Novo Nordisk Inc.: Novolog (Flexpen, Penfill), Fiasp (Flextouch, Penfill)
- Janssen Biotech, Inc.: Stelara
- Janssen Pharmaceuticals, Inc.: Xarelto
All approved manufacturer plans will issue rebates at the unit level, according to HRSA's updated guidance.
Legal Background and Industry Response
The pilot program emerges from legal disputes initiated in December 2024, when Johnson & Johnson, Bristol Myers Squibb, and Eli Lilly sued HRSA over the agency's authority to review and approve 340B program rebate models. The companies challenged HRSA's requirement for prior approval before implementing rebate models and proposed implementing cash rebates for 340B drug purchases independently.
HRSA responded to these unilateral implementation attempts by sending warning letters to manufacturers, asserting the agency's oversight authority over rebate model proposals.
Program Evaluation and Timeline
HRSA announced the voluntary rebate program in July 2024, designing it as a pilot to run for at least one year. The agency stated the program will help understand the "merits and shortcomings" of a rebate model within the 340B Drug Pricing Program framework.
However, the program faces resistance from healthcare providers. In a September 30 letter, the American Hospital Association told HRSA that the agency "vastly underestimated the costs the 340B Rebate Model Pilot Program will inflict on hospitals" and requested implementation delays.
340B Program Context
The 340B Drug Pricing Program, established in 1992, was created to incentivize safety net hospitals and clinics serving low-income and underserved populations by providing discounted outpatient drug costs. The program enables these facilities to stretch federal resources by dispensing discounted drugs, allowing them to expand healthcare services and programs for vulnerable patient populations.
