On July 31, 2026, the Health Resources and Services Administration (“HRSA”) issued the Notice Regarding 340B Rebate Model Pilot Program (the “Notice” regarding the “Pilot Program”). The Notice announced the availability of a rebate model that will allow qualifying manufacturers to provide the 340B price for selected drugs for initial price applicability years (“IPAYs”) 2026 and 2027 of the Medicare Drug Price Negotiation Program (“Negotiation Program”) through a retrospective rebate under the 340B Program and provided operationalization details. The Pilot Program is designed to facilitate deduplication of the Maximum Fair Price (“MFP”) and 340B discounts. The Notice follows a Request for Information published by HRSA on February 17, 2026 seeking comments on the rebate model framework and proposed Information Collection Request published on February 26, 2026 and June 15, 2026 regarding a potential 340B Rebate Model Pilot Program for manufacturers with Negotiation Program Agreements for IPAYs 2026 and 2027. The Notice follows an attempt by the agency to implement a similar Pilot Program in 2025, which was withdrawn following a lawsuit from a collection of hospitals seeking a preliminary injunction halting the program.
The Pilot Program is currently available only for selected drugs for IPAYs 2026 and 2027, with approved manufacturer rebate models starting as of January 1, 2027. The Pilot Program is limited to the NDC-11s of those selected drugs included in the program and only during the applicable Negotiation Program price applicability periods. HRSA contemplates, however, that there could be “broader application” of the rebate model in the future depending on the outcomes of the Pilot Program for the current scope of drugs.
Under the Pilot Program, participating manufacturers will provide 340B pricing through a rebate to the covered entity that is equal to wholesale acquisition cost (“WAC”) minus the applicable 340B price, paid at the unit level. Covered entities may continue to acquire drugs through existing distribution channels, but they must submit specified claims-level data to obtain rebates. Manufacturers must pay or deny rebate claims within ten calendar days of complete submission and permit covered entities to submit claims within at least 45 days of dispense. The Notice also requires participating manufacturers to provide a 15-day implementation grace period permitting rebate requests from covered entities for up to two unreplenished accumulated packages dispensed prior to the Pilot Program’s effective date, helping covered entities transition existing inventory into the 340B Rebate Model.
The Pilot Program limits data collection to specified pharmacy and medical claims fields and expressly prohibits use of Pilot Program data for purposes other than those identified in the Pilot Program. Covered entity data handled by manufacturers or technology platforms may not be collected, aggregated, shared, or licensed for other purposes. Notably, unlike in the Pilot Program proposed in 2025, HRSA will allow manufacturer participants in the current Pilot Program to use data generated through the Pilot Program to assist with “deduplication in Medicaid Managed Care.”
Participation in the Pilot Program is mandatory for all covered entities. While HRSA “careful[ly] consider[ed]” establishing certain carve-outs for covered entities (by, for example, excluding Federally Qualified Health Centers from the Pilot Program or making the Pilot Program voluntary for covered entities), HRSA concluded that scoping the Pilot Program in such a way “would undermine the integrity of the Pilot.” The Pilot Program also applies regardless of payer or indication.
Manufacturers of selected drugs for IPAYs 2026 and 2027 who would like to participate in the Pilot Program must submit rebate plans to 340BPricing@hrsa.gov for review and approval no later than August 24, 2026. Each plan must include specific criteria as enumerated in the Notice, including IT platforms, reporting requirements, rebates, and data. HRSA states that approvals of the plans, if granted, will be issued by September 24, 2026. Manufacturers of approved plans must give covered entities and other affected stakeholders 90 calendar days’ notice prior to implementation of a rebate pilot plan.
As noted above, the Pilot Program is scheduled to begin on January 1, 2027 (aligned with the effective date for IPAY 2027 MFPs). HRSA will use operational data from the Pilot Program to inform interim implementation summaries and a formal evaluation of the first year of Pilot Program operations, the latter of which HRSA will publish by April 30, 2028.
The Covington team is available to answer questions about the Pilot Program and help manufacturers develop rebate model plans. Please reach out to the authors of this alert to discuss aspects of the 340B Program, the Medicare Drug Price Negotiation Program, and other pricing schemes.
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