CANN Responds to HRSA's Revised 340B Rebate Model Pilot

A revised 340B Rebate Model Pilot Program will let qualifying drug manufacturers satisfy the 340B ceiling price, the discount manufacturers must provide safety-net providers on outpatient drugs, through rebates rather than upfront discounts, HRSA announced July 31, 2026.¹ The Community Access National Network (CANN) called the shift "a respite to the unfortunate realities of egregious program growth" in the program, according to a statement from CANN President and CEO Jen Laws (Laramie Hunter, written communication, August 5, 2026).

“Recently, HRSA revealed that the 340B program expanded to more than $100 billion in 2025, further calling compliancy, accountability, and transparency into question,” said Laws in a statement. “Not to say CANN is as prophetic as the Oracle of Delphi, but we have been sounding this alarm for quite some time.”

A Second Attempt at a Rebate Model

The revised pilot gives qualifying drug manufacturers a voluntary pathway to satisfy the 340B ceiling price through claims-based rebates, issued after a covered entity's claim is validated, rather than through the upfront discounts that have defined the program for more than 30 years.¹ The approach is limited to a defined set of covered outpatient drugs and is intended to improve transaction-level transparency for participating claims, help prevent duplicate discounts, and support nonduplication with the Medicare Drug Price Negotiation Program.

Manufacturers seeking to participate must submit rebate plans to HRSA by August 24, 2026, with approvals expected by September 24 and rebate models taking effect January 1, 2027.^1,3

This is HRSA's second attempt at a rebate-based pilot. The agency's original version, published in August 2025, was approved for participation by 9 manufacturers before the American Hospital Association and Maine Hospital Association sued under the Administrative Procedure Act. A federal district court in Maine granted a preliminary injunction in December 2025, the First Circuit declined to stay it, and HHS ultimately dropped its appeal; the district court vacated and remanded the original pilot in February 2026.

HRSA followed with a February 2026 request for information that drew more than 2400 public comments from hospitals, health centers, manufacturers, pharmacies, and patient advocates, which the agency says informed the revised Pilot.¹

HRSA has also reported that purchases through the 340B program grew from $53.7 billion in 2022 to more than $100 billion in 2025. HRSA cites that growth as part of the rationale for testing a new claims-based rebate model, while CANN argues the expansion underscores the need for stronger program oversight.

CANN: Rebate Model Shifts Incentives Toward Compliance

In the statement, Laws credited the revised pilot with incorporating feedback CANN and other stakeholders submitted during earlier comment periods, including how AIDS Drug Assistance Programs have operated successfully under a rebate structure and how payment timelines function in practice, both contractually and relative to other federal programs. Laws described the pilot as modest in the data it collects and in the scope of medications subject to a mandated rebate, while also acknowledging "the costly nature of retrospective dispute and audit processes.”

Laws further characterized the pilot as moving HRSA from a passive, reactive posture to more active oversight, noting that participating manufacturers will be required to file regular reports on the rebate model's function, that covered entities will get direct communication channels and technical assistance, and that HRSA plans to solicit feedback throughout the pilot's first year to gauge its impact.
“Opponents of the rebate model argue that retrospective reviews and audits are sufficient enough to warrant charging discounts upfront,” said Laws. “But this assumes a level of transparency and accountability that is currently nonexistent. Instead, a rebate model incentivizes covered entity compliance as a prerequisite to receiving 340B discounts. Retrospective reviews, audits, and dispute resolution processes are inherently reactive, identifying potential duplicate discounts only after they have occurred.”

Looking Ahead

The revised pilot represents HRSA's latest effort to evaluate whether a voluntary claims-based rebate model can improve oversight of the 340B program while addressing duplicate discount concerns raised by manufacturers and regulators.^1,2 Hospital groups that successfully challenged the agency's original 2025 rebate pilot have continued to oppose the revised approach, suggesting additional legal challenges remain possible as implementation moves forward.^2,3 HRSA is expected to review manufacturers' rebate plan submissions through September 2026, with approved models scheduled to take effect January 1, 2027, providing an early test of manufacturer participation and the feasibility of a claims-based approach within the 340B program.^1,2

References

1. HRSA announces revised 340B Rebate Model Pilot Program to strengthen care in rural and medically underserved communities. HRSA. July 31, 2026. Accessed August 5, 2026. https://www.hrsa.gov/about/news/press-releases/revised-340b-program-2026
2. Notice regarding 340B Rebate Model Pilot Program. Federal Register. August 3, 2026. Accessed August 5, 2026. https://www.federalregister.gov/documents/2026/08/03/2026-15633/notice-regarding-340b-rebate-model-pilot-program
3. Jeffries E. HRSA revises 340B rebate pilot program, hospital groups push back. Becker's Hospital Review. July 31, 2026. Accessed August 5, 2026. https://www.beckershospitalreview.com/pharmacy/hrsa-revises-340b-rebate-pilot-program/