HRSA Announces Revised 340B Rebate Model Pilot Program for 2027

On July 31, 2026, the Health Resources and Services Administration (“HRSA”) announced a revised 340B Rebate Model Pilot Program (“2026 Pilot”) to provide a rebate mechanism through which qualifying manufacturers may effectuate the 340B ceiling price for certain drugs sold to covered entities—as opposed to an upfront discount, which has been the longstanding model.

The 2026 Pilot, which is limited to the drugs selected for negotiation under Medicare, is open to qualifying manufacturers that submit plans meeting specific criteria.

HRSA’s stated purpose for the 2026 Pilot is to strengthen data requirements, dispute processes, privacy safeguards, transparency, and more, as detailed below. HRSA had issued a request for information (“RFI”) regarding a revised pilot on February 17.

According to HRSA, “[t]he revised Pilot follows extensive stakeholder engagement, including [the RFI] that generated more than 2,400 public comments, and reflects feedback received from hospitals, health centers, manufacturers, pharmacies, patient advocates, and other stakeholders.”

The 2026 Pilot adds procedural safeguards (notice, dispute resolution, resubmission rights) and other changes intended to address Administrative Procedure Act (“APA”) violations cited by a district court decision vacating HRSA’s earlier attempt at a rebate model in 2025. For many aspects of the 2026 Pilot, HRSA documented how it considered feedback and added protective measures. The 2026 Pilot aims to:

• improve claims-level transparency (public reporting, data definitions, dispute tools) and accountability through transaction-level verification;
• strengthen verification of eligible 340B transactions before rebates are issued;
• address cash‑flow concerns (grace period, unit‑level payments, price files);
• clarify data governance (use limitations, de‑identification standards, privacy protections);
• prevent duplicate discounts, which are prohibited under the 340B statute;
• generate better data to inform oversight and future policymaking; and
• preserve the long-term sustainability of the 340B Program.

We describe the 2026 Pilot, and provide a comparison chart with 2025, below.

Background

As EBG wrote in 2025, Section 340(a)(1) and (2) of the Public Health Service Act mandates that the Secretary of the Department of Health and Human Services (“HHS”) enter into agreements with manufacturers of covered outpatient drugs purchased by covered entities.

Currently, covered entities purchase covered outpatient drugs from manufacturers at the discounted 340B price. Yet starting in 2024, certain drug manufacturers sought to impose “rebate models” to provide covered entities the 340B discount in the form of a retroactive rebate instead of an up-front pricing discount. Under a rebate model, a covered entity purchases a drug at the standard acquisition cost and then submits various claim data elements to receive a post-purchase rebate reflecting the difference between the higher initial price and the 340B discounted price.

As described in HRSA’s announcement of the 2026 Pilot, the landscape governing 340B pricing obligations has also been shaped by the Inflation Reduction Act of 2022, Public Law 117-169, 136 Stat. 1818, in which Congress gave the Secretary of HHS authority to negotiate the prices that Medicare pays for certain pharmaceutical products (the “Medicare Drug Price Negotiation Program” or “MDPNP”). If a manufacturer provides a drug to a Medicare beneficiary at the maximum fair price established by the MDPNP and the negotiated price is lower than the 340B ceiling price, the manufacturer need not also provide a 340B discount to the covered entity.  

APA Challenge

HRSA issued its first call for applications (the “2025 Pilot”) on August 1, 2025, inviting manufacturers with MDPNP agreements with CMS for initial price applicability year 2026 to participate in a voluntary rebate model pilot program. The agency received 1,243 public comments and, in October, announced the approval of the first eight manufacturer applications.

On December 1, 2025, however, hospitals and hospital associations sued HRSA, HHS, and their respective officials for violations of the APA, seeking to enjoin the 2025 Pilot. The plaintiffs asserted that the 2025 Pilot was issued without warning to 340B hospitals or other covered entities, with the defendants failing to adequately consider the problem, costs to hospitals, and less burdensome alternatives.

On December 29, 2025, the U.S. District Court for the District of Maine enjoined the government from implementing the 2025 Pilot. While the defendants requested a stay of the preliminary injunction pending appeal, the U.S. Court of Appeals for the First Circuit denied it, and the government subsequently dismissed the appeal.

The parties agreed that the Program Application Notice for the 2025 Pilot would be vacated and remanded, along with the approvals of applications from drug manufacturers submitted pursuant to the notice and a corrected notice of August 7, 2025. The court issued an order to this effect on February 10, 2026.

The subsequent February 17, 2026, RFI issued by HRSA generated comments concerning, for example, 1) administrative costs; 2) staffing impacts; 3) systems and infrastructure; 4) administrative and implementation costs to covered entities, including payment timing and cash flow impacts; 5) rebate denials and dispute resolution; 6) data collection and reporting, including by manufacturers; 7) data privacy; 8) impact on patient care; 9) reliance on maintaining upfront discounts; and 10) duplicate discounts/program integrity. The revised 2026 Pilot includes the following requirements for submitted plans.

2026 Pilot Plan Requirements

Generally

IT platform and costs: Plan must identify the IT platform for covered entity data submission, with all platform costs borne by the manufacturer.

Advance notice and plan changes: Plan must provide 90 calendar days’ notice before implementation; changes to an approved plan require Office of Pharmacy Affairs (“OPA”) review/approval, and manufacturers must give HRSA the final approved plan for public posting.

Existing distribution channels: Plan must let covered entities order selected drugs through existing distribution mechanisms (e.g., 340B wholesaler accounts with wholesale acquisition cost (“WAC”) pricing loaded).

Technical assistance: Plan must provide a technical assistance/customer service component, including a manufacturer point of contact, for covered entities to raise questions in good faith.

Data security and minimization: Plan must ensure the IT platform secures the data and limits collection to only the elements necessary to provide 340B rebates.

Privacy safeguards: Plan must ensure the manufacturer and IT platform protect Protected Health Information/Personally Identifiable Information (“PHI/PII”) consistent with applicable federal privacy and data security laws, including the Health Insurance Portability and Accountability Act and its implementing regulations (“HIPAA”).

Exceptions: Plan must describe any exception that would not apply broadly to all covered entities (e.g., entities without third-party administrator access, rural hospitals/health centers) and communicate it to HRSA and affected entities.

Reporting Requirements

Reporting Data: Plan must allow covered entities to submit and report data up to 45 calendar days from date of dispense, with allowances for extenuating circumstances and other exceptions.

Receiving Data: Plan must ensure the IT platform can receive data from all applicable covered entities and filter out data not needed for the rebate.

Reports: Plan must ensure the IT platform can provide real-time reconciliation reports.

Price File: Plan must make a quarterly 340B price file available for each 11-digit national drug code (“NDC”), so covered entities can account for actual acquisition cost (post-rebate price) for Medicaid billing and for sliding fee scales or cost sharing with patients.

Periodic Reports: Plan must require the manufacturer to provide HRSA/OPA periodic reports, detailing purchases provided through rebates, claim denials, and other information evaluating the model’s effectiveness.

Rebates

Calculation: Plan must calculate the rebate as WAC less the 340B ceiling price on the day of dispense.

Specification: Plan must specify unit-level rebate payments (11-digit NDC).

Implementation: Plan must accommodate up to two unreplenished accumulated packages during the implementation phase, with a 15-calendar-day grace period for covered entities to submit rebate requests for such packages dispensed before the 2026 Pilot’s effective date. Requests must still be made within 45 days of dispense.

Payment: Plan must ensure rebates are paid (or denied, with supporting documentation) within 10 calendar days of completed data submission; the clock restarts if the submission is returned for incomplete data.

Denials: Plan must ensure rebates are not denied for diversion or Medicaid duplicate-discount concerns under section 340B(a)(5)(A) and (B) and must document the rationale for any denial.

Limitations: Plan must limit the rebate model to active selected drugs for initial price applicability years 2026 or 2027 on the CMS Medicare Drug Price Negotiation Selected Drug List (“List”), regardless of payer or indication, only during their negotiated-price effective dates, and only while the drug’s NDC–11 remains on the List and in its MDPNP price applicability period.

Data

Claim fields: All data requested as part of the Plan should be limited to only the following claim fields:

• Pharmacy claims data fields: Date of Service, Date Prescribed, RX Number, Fill Number, NDC 11, Quantity dispensed, Prescriber ID, Service Provider ID, 340B ID, RX BIN, RX PCN.
• Medical claims data fields: Date of Service, Claim Line Number, Claim Number, Unit of Measure, NDC-11, Quantity, Rendering Physician ID, Service Provider ID, 340B ID, Health Plan Name, Health Plan ID, Health Plan ID Qualifier (if available).

Data definitions. Data definitions for each field must be submitted with the plan for HRSA’s approval to ensure consistency and make it available for covered entities.

Cash. For uninsured or cash-paying patients, BIN, PCN, and Health Plan fields may be marked “CASH.”

Incomplete/Missing Data. Covered entities must be permitted to resubmit incomplete or missing data.

Wasted/Undispensed Units. Instructions for providing data regarding wasted or undispensed units must be provided as part of the manufacturer’s plan and communicated to covered entities.

Deadlines and Effective Date

Eligible manufacturers seeking to participate in the 2026 Pilot have until August 24, 2026, to submit rebate plans as described in the Federal Register to 340BPricing@hrsa.gov. The deadline for approval is September 24, 2026.

Rebate plans for selected drugs will become effective on January 1, 2027, for initial price applicability years 2026 and 2027.

Epstein Becker Green Staff Attorney Ann W. Parks contributed to the preparation of this post.

340B Pilot Comparison: 2025 v. 2026

General Requirements

Aspect	2025 Pilot	2026 Pilot	Change
Advance Notice Period	60 calendar days	90 calendar days	+30 days
Changes to Approved Plans	Not specified	Requires OPA review/approval; OPA determines if immediate or requires new notice	NEW

Rebate Payment Requirements

Aspect	2025 Pilot	2026 Pilot	Change
Payment Deadline	10 calendar days of data submission	10 calendar days of completed data submission	Same
Restart Clause	Not specified	10-day clock restarts if submission returned for incomplete data	NEW
Payment Level	“Should specify if rebates are paid at the package level, or at the unit level” (manufacturer choice)	“Must specify that rebates are paid at the unit level” (NDC-11) (mandatory)	STRENGTHENED
Enforcement for Late Payment	Not specified	HRSA can remove manufacturers from pilot for repeated or systemic noncompliance (5%+ of transactions delayed without justification)	NEW
Grace Period for Inventory	Not mentioned	15-calendar-day grace period for up to 2 unreplenished accumulated packages prior to the Pilot’s effective date	NEW

Data Submission & Reporting

Aspect	2025 Pilot	2026 Pilot	Change
Submission Deadline	45 calendar days from date of dispense, with allowances for extenuating circumstances/other exceptions	45 calendar days from date of dispense, with allowances for extenuating circumstances/other exceptions	Same
Data Fields Required	11 fields listed (pharmacy claim data only)	12 fields added for medical claims data	EXPANDED
Data Definitions	Not explicitly required	Must be submitted with plan for HRSA approval	NEW
Wasted/Undispensed Units	Not addressed	Instructions must be provided as part of manufacturer plan	NEW
Quarterly Price File	Not mentioned	Manufacturer must provide quarterly 340B price file for each 11-digit NDC	NEW
Resubmission Rights	Not specified	Covered entities “must be permitted to resubmit data if a rebate request is deemed incomplete or missing data”	NEW
Manufacturer Reporting to HRSA	“Periodic reports” (vague)	“Periodic reports” with specific data requirements on purchases required through rebates, denials, and other information that may evaluate the effectiveness of the rebate model	CLARIFIED
Real-Time Reconciliation Reports	Yes, required	Yes, required	Same

Denial & Dispute Resolution

Aspect	2025 Pilot	2026 Pilot	Change
Denial Documentation	Required; must provide rationale for specific reasons	Required; must provide rationale for specific reasons	Same
What Cannot Be Denied For	Diversion or Medicaid duplicate discounts	Diversion or Medicaid duplicate discounts; 340B ineligibility; perceived lack of WAC purchases	EXPANDED
Dispute Resolution Pathway	Not specified	Defined pathway with specified timeframes for review and response; tools made available for covered entities to report denials	NEW
Public Reporting	Not specified	Information on dispute pathway to be made public within 30 days of the Pilot’s effective date	NEW
ADR Availability	Mentioned as option for manufacturers if they have concerns regarding diversion or Medicaid duplicate discounts	Explicitly available to covered entities for unresolved disputes per 42 U.S.C. 256b(d)(3)(A)	EMPHASIZED
Enforcement for Unjustified Denials	Not specified	HRSA can remove manufacturers from pilot if denying 5%+ of claims without acceptable justification	NEW

Data Privacy & Security

Aspect	2025 Pilot	2026 Pilot	Change
HIPAA Compliance	Plan should ensure mechanisms to protect patient identifying information consistent with HIPAA and any other applicable privacy/data security laws	Plan must ensure mechanisms to protect PHI consistent with HIPAA and other applicable privacy/data security laws	STRENGTHENED
Deidentification Standards	Not mentioned	Extensive guidance on deidentification methods (safe harbor v. expert determination under 45 CFR 164.514)	NEW
Timing of Deidentification	Not addressed	Clarifies that automated deidentification can occur prior to data ingestion so manufacturer/vendor never receives PHI	NEW
Disclosure Authority	Not specified	Clarifies that HIPAA permits disclosure for “payment activities” which include activities undertaken to obtain reimbursement for the provision of health care	NEW
Data Use Limitations	See below	Data collected under Pilot “should not be used for any purpose other than those explicitly identified in this Pilot” - includes restrictions on any collecting, aggregating, sharing, or licensing data by manufacturers or technology platforms	NEW
Platform Data Safeguards	Must have “assurances in place” to ensure that the data is secure and protected and collection of the data is limited to listed elements necessary for providing 340B rebates	Must have the capacity to filter and use only the data required to effectuate the rebate	STRENGTHENED

Manufacturer Costs

Aspect	2025 Pilot	2026 Pilot	Change
IT Platform Costs	Manufacturers must bear all costs	Manufacturers must bear all costs	Same
Manufacturer Compliance Costs	“[N]o additional administrative costs of running the rebate model must be passed onto the covered entities”	Manufacturer plans must not pass administrative costs (fees) to covered entities	CLARIFIED

Scope & Application

Aspect	2025 Pilot	2026 Pilot	Change
Drugs Covered	MDPNP selected drugs for initial price applicability year 2026	MDPNP selected drugs for initial price applicability years 2026 and 2027	EXPANDED
Applicability to Entity Types	All covered entities (no exemptions)	All covered entities (no exemptions)	Same
Covered Entity Participation	Mandatory once manufacturer plan is approved	Mandatory once manufacturer plan is approved	Same

Program Monitoring & Evaluation

Aspect	2025 Pilot	2026 Pilot	Change
Pilot Duration	Minimum 1 year	Minimum 1 year	Same
Evaluation Framework	Vague: “OPA’s evaluation of data and reports”	Specific: Will use quantitative data (submissions, payments, denials, disputes, timing, dispute resolution outcomes, reporting burden) and qualitative methods	STRENGTHENED
Stakeholder Engagement	“Additional information about manufacturer reporting and stakeholder feedback opportunities will be provided in the future”	Interim periodic summaries to be published; evaluation report by April 30, 2028	MORE SPECIFIC
Public Reporting	To be determined	Aggregate data (non-confidential) to be made public	NEW

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The Health Law Advisor blog is currently edited by Emily Chi Fogler.