HHS Will Issue Guidance on 340B Rebate Models within 30 Days

In response to prodding by Judge Dabney Friedrich, HHS submitted a filing to the United States District Court for the District of Columbia that it will release guidance by June 1 on use of 340B rebate models in place of an upfront discount. The filing states that the use of 340B rebate models would be “a significant change” for 340B stakeholders. The filing also states that HHS “continues to carefully evaluate its options alongside ongoing efforts to address 340B program integrity matters and keeping in mind the approaching effective date of certain Inflation Reduction Act requirements”.

The filing is part of consolidated cases filed by Eli Lilly, Novartis, Sanofi, Bristol Myers Squibb and Kalderos arguing that 1) HRSA’s rejection of its rebate models is arbitrary and capricious and runs counter to the 340B statute and 2) HRSA is acting outside of their statutory authority to require approval of manufacturers provision of the ceiling price. The HHS position is that the 340B statute prohibits unilateral implementation of rebate models, but HHS has left open the possibility that it could approve a rebate model.  340B Health and two covered entities intervened in the lawsuit, arguing that the plain language of the 340B statute requires upfront discounts.

Powers will issue an alert analyzing the HHS guidance as soon as it is published.