11/03/2025 – HRSA Approves Manufacturer Proposals to Offer 340B Pricing Through Rebate Model

On October 30, 2025, HRSA updated its website to announce that it has approved eight manufacturers’ proposals to offer 340B discounts on nine drugs only as a rebate rather than as a point-of-purchase discount. The update includes more details about its controversial rebate model pilot program released in August 2025. The rebate model is slated to begin on January 1, 2026.

The new rebate pilot program would force 340B covered entities to purchase certain high-cost drugs at the full wholesale acquisition cost (WAC) price, submit claims data to a third-party vendor, and then wait for manufacturers to issue rebates. While the model allows covered entities to order drugs using their existing supply chain, the wholesaler would sell the drug to the covered entity at WAC rather than at the 340B price and the drug manufacturers would be required to issue the difference as a rebate. The model denies the 340B program’s up-front benefit to covered entities, replacing it with an after-the-fact rebate.

The drugs subject to the pilot are nine of the ten drugs that are subject to Medicare negotiated pricing under the Inflation Reduction Act: Bristol Myers Squibb’ Eliquis, Amgen’ Enbrel, AstraZeneca’ Farxiga, Pharmacyclics’ Imbruvica, Merck’s Januvia, Novo Nordisk’s Fiasp, Boehringer Ingelheim’ Jardiance, and Johnson & Johnson’s Stelara and Xarelto. HRSA did not include Novartis’s Entresto, a heart failure drug, in the first set of drugs subject to the model.

HRSA’s website update sheds light on several other formerly undetermined rebate model details. HRSA announced that all covered entities will be required to participate in the rebate model, even though its August 2025 announcement stated that the model could be limited to certain covered entities and denying requests from some grantee types to be excepted. Covered entities must use the Beacon Channel Management (Beacon) platform to submit their rebate data to drug manufacturers. HRSA announced the approval of data fields for medical claims for rebates on clinic-administered drugs a significant expansion of HRSA’s proposed submission requirements, which focused only on data for pharmacy dispenses. HRSA estimated that each covered entity submission would take two hours if covered entities submit data to manufacturers on a weekly basis.

Although use and approval of any rebate model reflects HRSA’s apparent interest in supporting manufacturers’ use of a rebate mechanism, the model includes several protections for covered entities. The website announces that manufacturers will issue rebates at the unit level, rather than requiring covered entities to wait until manufacturers receive a full package size. Further, if manufacturers fail to issue a rebate within the 10-day timeframe after the covered entity has reported concerns to the manufacturer and Beacon, the covered entities may email HRSA with its concern. The new notice also requires periodic reports from manufacturers to HRSA and allows HRSA to revoke approval for a manufacturer’s rebate model participation if the manufacturer consistently fails to resolve rebate reimbursement issues.

HRSA’s release of this update during the government shutdown demonstrates the importance that the agency is placing on the rebate pilot. Generally, government agencies do not interact with members of the public about non-funded activities during a shutdown. In addition, HRSA asked the Office of Management and Budget (OMB) for emergency approval of the rebate model, which HRSA has only successfully requested in one other instance in the past five-plus years.

HRSA’s website update maintained the January 1, 2026, start date for the pilot. Given the requirement that manufacturers provide covered entities with at least 60 days’ notice of their rebate plans, participating drug manufacturers are required to inform covered entities about the rebate pilot details by November 2, 2025. Most OPA staff are likely furloughed, so it is unclear how OPA will enforce the deadline if drug manufacturers fail to provide the appropriate notice.

Although HRSA is moving forward with the rebate model pilot, the DC District Court of Appeals is reviewing HHS’s authority to use rebates in the 340B program. Two lower courts held in favor of HHS; however, the cases were appealed to the higher court where oral arguments are slated to begin on November 17, 2025.

Powers will continue to monitor activity surrounding the rebate model and other drug pricing developments. Please contact Powers’ drug pricing team, or your lead Powers attorney, if you have any questions.