For more than 30 years, the 340B Drug Pricing Program has provided direct access to discounted drugs for qualifying providers that fill a safety net role in their communities. However, pharmaceutical manufacturers soon will be allowed to withhold statutory discounts, creating arbitrary, unnecessary costs and risk for providers of essential health services.
The Health Resources and Services Administration (HRSA), which administers the 340B program, initially opposed manufacturer efforts to implement rebate models. However, effective Jan. 1, 2027, HRSA has approved a new mandatory “Pilot” Rebate Model Program, which allows manufacturers to withhold access to up-front discounts for certain drugs until a lengthy claim process is complete.
America’s Essential Hospitals estimates rebate models could cost 340B hospitals $4.6 billion in 2027 alone, including at least $1.5 billion in direct operating costs unrelated to patient care.
Congress should reject the rebate model or delay implementation until HRSA demonstrates that this costly new system is necessary and will not divert billions of dollars from patient care. We urge Congress to pass the 340B Rebate Model Delay Act (H.R. 10770) before rebates take effect on Jan. 1, 2027. The 340B program was created to help safety net providers stretch scarce resources and expand access to care. Hospitals should not have to spend billions of dollars, build duplicative infrastructure, and assume new financial risk simply to obtain the same statutory discounts they have received for more than 30 years.
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