340B Drug Rebate Pilot Program Revised by HRSA

On August 3, 2026, the Health Resources and Services Administration (HRSA) published a revised 340B Rebate Pilot Program (the “Pilot Program”) in the Federal Register.¹ The Pilot Program, set to launch on January 1, 2027, responds to growing calls from pharmaceutical manufacturers and lawmakers for reform related to the 340B Program’s program expansion and its traditional upfront discount structure. HRSA previously announced plans to implement a 340B pilot program in August 2025;² however, the program was paused following litigation brought under the Administrative Procedure Act (APA),³ resulting in HRSA’s subsequent withdrawal of the model and the publication of a Request for Information (RFI) to gather broad stakeholder feedback. Goodwin has previously covered the 2025 proposed pilot program and other 340B updates, including the Ninth Circuit’s recent decision regarding 340B False Claims Act enforcement and ongoing 340B litigation.

HRSA issued the revised Pilot Program as a Federal Register Notice, not as a proposed rule or notice of proposed rulemaking. The notice was published on August 3, 2026, and states that it is effective immediately upon publication, unless revised by a future notice. It does not open a new public-comment period.

The Pilot Program allows qualifying drug manufacturers, with prior Department of Health and Human Services (HHS) approval, to use rebates rather than upfront 340B discounts for a limited group of drugs. The covered drugs are the NDC-11s of drugs selected under the Medicare Drug Price Negotiation Program for initial price applicability years 2026 and 2027, during each drug’s price applicability period. The Pilot Program applies across all payers and indications.

Manufacturer participation is voluntary and requires HRSA/HHS approval, but covered entities do not receive a general option to remain under the traditional upfront-discount method for an approved manufacturer-drug combination. Approved manufacturers must participate for at least one year and may not implement a rebate plan before receiving HHS approval.

How the Pilot Program Would Operate

• Acquisition and rebate amount: Covered entities would generally obtain covered products through existing distribution channels with wholesale acquisition cost (WAC) loaded, then seek a rebate equal to WAC minus the 340B ceiling price on the date of dispense.
• Claims Submission: Covered entities must be allowed at least 45 calendar days from the date of dispense to submit the required claims-level data, with allowances for extenuating circumstances and claims-status adjustments.
• Payment Deadline: Manufacturers must pay the rebate, or issue a documented denial, within 10 calendar days after a completed data submission. If a submission is incomplete, the 10-day clock restarts when the missing information is supplied.
• Technology and Data: The manufacturer must pay all costs of the required submission platform. The platform must support all applicable covered entities, provide real-time claims-status reconciliation, limit collection to required data, provide technical assistance, and protect protected health information (PHI) and other personally identifiable information consistent with applicable law, including U.S. Health Insurance Portability and Accountability Act (HIPAA).
• Starting Inventory Grace Period: To facilitate the transition to the Pilot Program, HRSA will allow for a 15-calendar day grace period prior to the January 1, 2027, effective date during which covered entities may submit rebate requests for up to two unreplenished accumulated packages of a covered drug. For example, a covered entity may request a rebate for up to two packages dispensed from its neutral inventory on December 16, 2026, even though the Pilot Program’s effective date for that product is January 1, 2027. Such requests must still be submitted within the standard 45-day claims submission window measured from the date of dispense.
• Advance Notice: Approved plans must provide covered entities and other affected parties at least 90 calendar days of implementation notice, including registration and operational instructions.

No Categorical Exemptions

HRSA specifically rejected carving up or phasing in the Pilot Program according to covered-entity category. The notice acknowledges that Critical Access Hospitals (CAHs), rural hospitals, Federally Qualified Health Centers (FQHCs), and larger health systems raised different financial and operational concerns. Nevertheless, HRSA concluded that differences between the average hospital and the average FQHC do not justify excluding particular classes. It further states that the duplicate-discount and nonduplication risks are drug-specific and apply to all covered entities, rather than only to particular provider categories.

Individualized exceptions may be possible but are not guaranteed. A manufacturer plan must describe any non-broad exception and communicate it to HRSA and affected providers. Examples include entities without third-party administrator (TPA) access, rural hospitals, or health centers. Any accommodation depends on the manufacturer plan and HRSA approval; it is not automatic protection for CAHs, FQHCs, or rural providers.

Implementation Timeline

Public Comment and Legal Form of the Action

HRSA does not request comments and provides no deadline for public comments on the Pilot Program. HRSA treats the stakeholder-input process as already completed. It reports that it reviewed 2,449 public comments and 26 nonpublic submissions — 2,475 total — submitted in response to the February 17, 2026, RFI. The RFI comment period closed April 20, 2026. A separate Paperwork Reduction Act process addressed the information-collection burden and had a 30-day comment deadline of July 15, 2026; that was not a new comment period on the underlying pilot policy.

The document is labeled “ACTION: Notice,” includes no proposed regulatory text, and does not propose an amendment to the Code of Federal Regulations. HRSA is therefore implementing the program through an operative notice rather than first publishing a Notice of Proposed Rulemaking (NPRM) and receiving another round of comments. This procedural choice may remain subject to APA litigation; describing the document as a notice does not, by itself, resolve whether a court could view the policy as a substantive rule requiring notice-and-comment rulemaking.

Most Important Implications for Manufacturers

• Participation in the Pilot Program is limited to manufacturers with drugs on the CMS Medicare Drug Price Negotiation Selected Drug List for initial price applicability years 2026 and 2027, which represents less than 5.5% of total 340B sales according to HRSA’s estimates. As a result, the vast majority of 340B transactions will continue to operate under the traditional upfront discount model, limiting the Pilot Program’s near-term impact on overall program integrity. However, HRSA has reserved the right to expand the program to additional drugs or price applicability years in the future.
• While the Pilot Program may be initially small in scale, it coincides with legislation introduced in both the House and Senate in June 2026 that explores broader reforms to transition the 340B Program to an upfront discount model.⁴ Accordingly, even manufacturers that do not participate in the Pilot Program should closely monitor its structure and the insights generated, as they may inform future, larger-scale reforms to the 340B Program.
• Small, midsize, and other manufacturers who are not participating in the Pilot Program should carefully track the development of the Pilot Program to best understand how they may operationalize their own rebate program after the pilot concludes.
• The Pilot Program offers participating manufacturers an opportunity to address long-standing concerns related to covered entity 340B compliance. By requiring covered entities to submit validated claims-level data as a precondition to receiving the 340B discount, the Pilot Program builds compliance verification into the payment process itself — potentially reducing the opportunity for duplicate discounts to go undetected and providing manufacturers with a more defensible basis for tracking 340B-eligible transactions.

Most Important Implications for Covered Entities

• The Pilot Program contains no categorical exemption for CAHs, FQHCs, rural hospitals, Rural Referral Centers, Sole Community Hospitals, children’s hospitals, cancer hospitals, Disproportionate Share Hospital hospitals, or other 340B covered-entity classes. Once an approved manufacturer plan applies to a selected drug, the rebate process is intended to apply across covered-entity types.
• CAHs, FQHCs, rural hospitals, and other safety-net providers should plan on inclusion. Organizations seeking hardship relief should press for plan-specific exceptions based on lack of TPA access, rural status, liquidity constraints, or limited operational capacity.
• Providers should identify the affected 2026 and 2027 negotiated drugs, assess WAC and cash-flow exposure, and confirm systems can submit claims within 45 days and reconcile manufacturer action within 10 days.
• Covered entities should monitor HRSA’s publication of approved plans because those documents will determine the covered drugs, platform instructions, individualized exceptions, and operational details effective January 1, 2027.

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The Goodwin Healthcare and Life Sciences teams will continue to monitor activity from the courts and administration related to the 340B Program. For more information on the issues discussed in this alert, please see the Goodwin Center for Market Access and Pricing page.

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