Thoughts on 340B Rebate Pilot Program

As the pharmacy landscape continues to evolve, a major transformation is on the horizon for the 340B Drug Pricing Program. Recently, the Health Resources and Services Administration’s (HRSA) Office of Pharmacy Affairs (OPA) announced approval of eight manufacturer plans covering nine drugs to participate in the 340B Rebate Model Pilot Program, which is set to launch January 1, 2026. This initiative represents one of the most significant shifts in the 340B program’s structure since its inception in 1992, introducing a new rebate-based model that fundamentally changes how covered entities access discounted drugs.

What Is the 340B Rebate Model Pilot Program?

Under the traditional 340B model, covered entities, such as safety-net hospitals, community health centers, and specialized clinics, purchase outpatient drugs at discounted prices directly from manufacturers. These discounts are applied upfront at the time of purchase.

The 340B Rebate Model Pilot Program changes this approach. Instead of receiving immediate discounts, covered entities will purchase select drugs at wholesale acquisition cost (WAC) and later submit claims data to receive rebates that reduce the net cost down to the 340B ceiling price. In other words, providers will now pay the full price upfront and get reimbursed afterward, similar to how rebates work in the pharmacy benefit management (PBM) world.

All rebate submissions will be processed through the Beacon Platform, operated by Second Sight Solutions, the same company behind 340B ESP.

OPA-Approved Manufacturer and Drug List

The following manufacturers and drugs have been approved by the OPA to participate in the pilot program, all beginning January 1, 2026. These plans apply to all covered entity types.

• Bristol Myers Squibb: ELIQUIS

• Immunex Corporation: ENBREL

• AstraZeneca AB: FARXIGA

• Pharmacyclics: IMBRUVICA

• Merck Sharp Dohme: JANUVIA

• Boehringer Ingelheim: JARDIANCE

• Novo Nordisk Inc: NOVOLOG; NOVOLOG FLEXPEN; NOVOLOG PENFILL; FIASP; FIASP FLEXTOUCH; FIASP PENFILL

• Janssen Biotech, Inc: STELARA

• Janssen Pharmaceuticals, Inc: XARELTO

Under this model, covered entities must continue to make purchases through their 340B wholesaler account and can only request rebates on the above drugs dispensed to eligible 340B patients after the purchase is made. Manufacturers will work with distributor partners to ensure that the WAC price is properly loaded into the 340B wholesaler accounts for rebate processing.

Stakeholder Perspectives

Hospitals: Concern Over Administrative Burden

Hospital associations, including the American Hospital Association (AHA), have expressed strong opposition to the pilot program. AHA argues that HRSA “vastly underestimated” the administrative burden involved, projecting that hospitals may need up to two additional full-time staff to manage compliance, at a cost ranging between $150,000 to $500,000 annually per hospital. HRSA’s own estimate of just 104 annual hours per hospital is viewed by many as unrealistic.

The AHA estimates that across the roughly 2,700 340B hospitals, the true administrative impact could exceed 11 million hours annually, calling for at least a one-year delay in implementation to allow providers time to prepare.

Manufacturers: Strong Support

In contrast, PhRMA and participating drug manufacturers have praised HRSA’s move. They describe the rebate model as a step toward “greater transparency and accountability” in the 340B program. Some manufacturers have even urged HRSA to expand this model across all 340B-covered outpatient drugs, viewing it as a way to curb duplicate discounts and improve program oversight.

State Medicaid Programs: Cautious Observation

State Medicaid agencies are also watching closely. Because covered entities will pay WAC upfront but later receive rebates, states must reconsider how they define and reconcile “actual acquisition cost” for billing purposes. This may require updates to both fee-for-service and managed care reimbursement policies to prevent conflicts and ensure compliance during audits.

Key Risks and Considerations

1. Cash Flow Disruption: Safety-net providers may experience financial strain under this new structure. Paying full WAC upfront before receiving rebates could disrupt cash flow, especially for high-cost specialty drugs. For some, this change could feel like an interest-free loan to manufacturers, further tightening already limited operating margins.

2. Administrative Complexity: The rebate submission process requires covered entities to submit 11 data fields per claim, including prescriber identifiers, dates of service, and covered entity information. Managing these submissions, along with tracking rebate statuses, adds a new layer of operational complexity to already resource-constrained organizations.

3. Technology Dependence: Since all transactions must go through the Beacon platform, there’s concern about centralization and potential system failures. A single processing platform means that any technical issue could disrupt rebate payments across thousands of covered entities.

Drawing Parallels: The PBM Connection

From a pharmacy benefit perspective, the 340B rebate model pilot bears striking resemblance to rebate mechanisms used by PBMs in the commercial insurance world. Like PBMs, the rebate process introduces administrative intermediaries and delays in realizing the actual cost savings.

For employers and health plans, groups I work closely with to optimize pharmacy benefit plan designs, this mirrors a long-standing challenge: ensuring that complex rebate flows actually translate into lower costs and better value for members.

What It Means for Plan Sponsors and Benefit Strategy

While this pilot technically targets 340B entities, its downstream effects could ripple across the entire drug distribution and reimbursement chain.

Here’s how it could impact the broader pharmacy benefit landscape:

1. Plan Sponsor Impact: When 340B-covered entities face delayed rebates or shifting cash flow, it can influence how they contract with PBMs, participate in network arrangements, and ultimately how savings are passed, or not passed, along to plan sponsors.

2. Benefit Design Implications: The rebate model could reshape the economics of hospital-administered and outpatient drugs, prompting payers to reassess formulary tiers, specialty coverage structures, and site-of-care strategies.

3. Transparency and Value Alignment: Manufacturers gaining greater utilization visibility through the rebate process could pave the way for more transparent, value-based arrangements, but only if data sharing extends across all stakeholders, not just between manufacturers and providers.

4. Clinical Quality Considerations: If safety-net providers experience cash-flow pressures or operational strain, patient care could be indirectly affected, particularly for populations reliant on 340B-supported services. Plan sponsors should monitor whether these changes impact access, adherence, or patient outcomes.

Strategic Takeaway

The 340B rebate pilot underscores a broader truth: pharmacy benefit management is increasingly interconnected. Employers and health plans can no longer view manufacturer-provider dynamics as isolated, they directly shape network performance, access, and value.

As 340B transitions from a point-of-sale discount model toward a potential rebate-based future, plan sponsors must stay engaged with their PBMs, consultants, and providers to understand how cost savings are generated, and where they might shift.

Because ultimately, the goal remains the same: ensuring that every dollar spent on pharmacy benefits delivers the highest value for both the plan and its members.

Final Thoughts

As someone working in managed care and pharmacy benefit strategy, I see the 340B Rebate Model Pilot Program as both a policy experiment and a precedent-setting moment. On one hand, it may strengthen accountability and bring long-sought visibility into 340B pricing dynamics. On the other hand, it risks introducing PBM-like complexities that could strain safety-net institutions already serving vulnerable populations.

The 340B program has always stood at the intersection of access, affordability, and accountability. This next part will test how well those principles can coexist under a new rebate-driven framework. Time will tell...