340B Program Faces New Scrutiny: HHS Seeks Feedback on Revised Rebate Model
The Department of Health and Human Services (HHS) is once again evaluating the future of its 340B Drug Pricing Program, a vital initiative providing discounted pharmaceuticals to hospitals serving vulnerable populations. This comes after federal courts blocked the agency’s initial attempt to implement a new rebate model, leading HHS to formally abandon that approach.
What’s Driving the Change?
The original pilot program, announced in August, proposed a significant shift for 340B hospitals. Instead of receiving upfront discounts, hospitals would have been required to pay full market prices and then seek reimbursement based on rebates negotiated with manufacturers. This change sparked immediate opposition, with concerns raised about increased costs and potential harm to care in rural and underserved communities.
The American Hospital Association (AHA) and others filed a lawsuit arguing the proposed model would impose hundreds of millions of dollars in added costs. Courts sided with the plaintiffs, issuing injunctions and ultimately leading HHS to request the issue be remanded back to the Health Resources and Services Administration (HRSA).
HRSA’s New Approach: A Request for Information
On February 13, 2026, HRSA issued a Request for Information (RFI), initiating a public dialogue to gather feedback on potential alternative rebate-based models. Stakeholders have until March 19, 2026, to submit comments. This RFI signals a willingness to reconsider the program’s structure, but also a continued interest in exploring rebate models.
Industry Response: Cautious Optimism and Concerns
The AHA has welcomed HRSA’s attempt to gather detailed information, but emphasized the require for HHS to reconsider policies that could shift costs onto hospitals serving vulnerable communities. Aimee Kuhlman, AHA vice president of advocacy and grassroots, stated the organization hopes that after careful consideration of stakeholder feedback, HRSA will recognize the potential negative impact of increased costs on hospitals serving rural and underserved areas.
The Importance of the 340B Program
Established in 1992, the 340B program allows eligible healthcare organizations – primarily hospitals serving a high proportion of low-income and uninsured patients – to purchase outpatient drugs at significantly reduced prices. These savings are intended to be passed on to patients, allowing hospitals to stretch limited resources and provide more affordable care. The program is a key priority for the AHA, as potential changes could diminish these benefits.
What’s Next for the 340B Program?
Any new rebate program will require public notice, a comment period, and a delayed effective date of at least 90 days after announcing any manufacturer approvals. This suggests a more deliberate and transparent process moving forward.
The future of the 340B program remains uncertain. The RFI represents an opportunity for stakeholders to shape the program’s evolution, but the underlying tensions between pharmaceutical manufacturers, hospitals, and the government remain. The program’s ability to continue providing affordable care to vulnerable populations hinges on finding a sustainable and equitable model.
FAQ
What is the 340B program? The 340B program is a government program that allows eligible hospitals and clinics to purchase outpatient drugs at discounted prices.
Why is the 340B program under review? The program is under review due to concerns from pharmaceutical manufacturers and legal challenges to a proposed rebate model.
What is an RFI? An RFI, or Request for Information, is a formal process used by government agencies to gather input from stakeholders before making policy changes.
What is the deadline to submit comments on the RFI? The deadline to submit comments is March 19, 2026.
What is the AHA’s position on the 340B program? The AHA supports the 340B program and is advocating for policies that protect its benefits for hospitals and patients.
Did you recognize? The 340B program has been in place for over 30 years, providing financial assistance to hospitals serving vulnerable communities.
Pro Tip: Stay informed about the 340B program by regularly checking the HRSA website and following updates from the AHA.
Want to learn more about healthcare policy and its impact on your community? Explore our other articles or subscribe to our newsletter for the latest updates.
