340B Drug Pricing Program Is on a Slippery Slope

On July 31, 2025, notice was published in the Federal Register by the Health Resources and Services Administration (“HRSA”) of a “340B Rebate Model Pilot Program” (“340B Pilot Program”). The 340B Pilot Program’s stated purpose was “for qualifying drug manufacturers to effectuate the 340B ceiling price on select drugs to all covered entities, and to collect comments on the structure and application process of the 340B Rebate Model Pilot Program….” While the foregoing purpose statement is not entirely clear of purpose or intent, we know that it comes after numerous attempts by drug manufacturers to shift the burden for fronting the rebate discount amounts from the drug manufacturers to the 340B participating providers, many of whom are already financially spread thin serving the underinsured and uninsured.

Pursuant to the 340B Pilot Program, the 340B participating provider will have to pay the full cost of the drug and then submit HRSA specified data to the drug manufacturer within 45 days of dispensing the drug on a technology platform developed by the drug manufacturer. Upon receipt of the data from the 340B participating provider, the drug manufacturer would have 10 days to issue the rebate to the provider. Notably, HRSA appears to have embraced the drug manufacturer’s claim that there is deduplication as a basis for the 340B Pilot Program (i.e., both a Medicaid rebate and a 340B discount received by participating providers). However, claims of alleged fraud are not uncommon with the current administration.

The 340B Pilot Program initially only applies to the following 10 drugs: Januvia (diabetes); Fiasp (diabetes); Enbrel (rheumatoid and psoriatic arthritis); Farxiga (diabetes, heart failure, chronic kidney disease); Jardiance (diabetes, heart failure, chronic kidney disease); Stelara (psoriasis, colitis and Crohn’s disease); Xarelto (blood clot prevention); Eliquis (blood clot prevention); Entresto (heart failure) and Imbruvica (blood cancers). The drugs have negotiated prices with CMS that become effective on January 1, 2026. Should the 340B Pilot Program be expanded to apply to all drugs, the administrative and financial burden on nonprofit providers is likely to be significant.

Comments to the 340B Pilot Program may be submitted for 30 days post the publication date of July 31, 2025.

As new developments arise, we will continue to provide updates on our Health Law Insights page. In the meantime, please contact one of the lawyers in Shipman’s Health Law practice group if you have questions or need guidance as the landscape of healthcare law continues to change.