The 340B Drug Pricing Program enables covered entities to purchase outpatient prescription drugs at a discounted price from pharmaceutical manufacturers.
340B Rebate Model Pilot Program
The 340B Rebate Model Pilot Program, announced by HRSA’s Office of Pharmacy Affairs, begins January 1, 2026 (with Novartis’ Entresto starting April 1). It tests replacing upfront 340B discounts with post-sale rebates for a limited set of drugs. The pilot applies to 10 drugs selected under CMS’s Medicare Drug Price Negotiation Program (IPAY 2026), including Eliquis, Enbrel, Entresto, Farxiga, Imbruvica, Januvia, Jardiance, NovoLog/Fiasp products, Stelara, and Xarelto.
- Note: Implementation has been temporarily halted by a court order issued on December 29, 2025, when the U.S. District Court for the District of Maine granted a nationwide preliminary injunction blocking the Pilot effective January 1, 2026.
- The Court found that HRSA likely violated the Administrative Procedure Act (APA) by rolling out the Pilot with a “threadbare administrative record” that failed to assess the financial and operational burdens on 340B-covered entities and by inadequately responding to public comments.
- Additionally, the Court determined that the Pilot would cause irreparable harm to safety-net providers who rely on upfront discounts and that the balance of equities and public interest supported the injunction.
- Most Recent Update (January 12, 2026):
- The Trump administration has signaled that it intends to drop its appeal of the court order blocking the 340B Rebate Model Pilot Program. In a January 12 filing, the Department of Justice informed the U.S. Court of Appeals for the First Circuit that the parties, including HHS and the American Hospital Association, are in discussions to return the challenged rebate approvals to HHS for reconsideration, and the administration anticipates dismissing the appeal shortly.
- Hospital Outpatient Prospective Payment System (HOPPS)
- 340B Acquisition Cost Survey: CMS will conduct a survey of the acquisition costs for each separately payable drug acquired by all hospitals paid under the Hospital Outpatient Prospective Payment System (OPPS), including specified covered outpatient drugs (SCODs) such as those acquired under the 340B program. CMS indicated that this survey would be open starting at the end of CY 2025 to early CY 2026. CMS intends for the survey to be completed in time for the results to be used to inform policymaking beginning with the CY 2027 OPPS/ASC proposed rule.