340B Reform Is Back on the Agenda: What Healthcare Leaders Need to Know
After more than three decades with relatively few statutory changes, the federal 340B Drug Pricing Program is once again at the center of healthcare policy discussions in Washington.
Created in 1992, the 340B Drug Pricing Program requires participating drug manufacturers to provide discounted outpatient medications to eligible safety-net healthcare organizations, helping them stretch limited resources to serve vulnerable patient populations.
In recent weeks, the Health Resources and Services Administration (HRSA) has revived its proposed 340B Rebate Model Pilot Program, while Congress has introduced multiple bipartisan proposals addressing different aspects of the program. Although the approaches vary, they share a common theme: growing interest in reexamining a program that has become increasingly complex since its creation in 1992.
For hospitals, federally qualified health centers and other 340B covered entities, the recent activity signals that the program is likely to remain a significant policy issue in the months ahead.
Administration Moves Forward with Revised Rebate Pilot
One of the most significant recent developments came on July 31, when HRSA released revised guidance for its proposed 340B Rebate Model Pilot Program.
Originally proposed in 2025, the pilot was scheduled to take effect on Jan. 1, 2026, but legal challenges from hospitals and other stakeholders prompted HRSA to withdraw the proposal and seek additional public input. The revised guidance incorporates many of those stakeholder comments while preserving the agency's overall approach. The one-year pilot is now scheduled to begin Jan. 1, 2027.
Importantly, the pilot remains narrowly focused. It applies only to drugs included in the Medicare Drug Price Negotiation Program rather than the broader universe of 340B drugs, reflecting HRSA's intent to evaluate the rebate model before considering any broader implementation.
Under the revised framework, manufacturers wishing to participate must submit implementation plans to HRSA by Aug. 24, with agency approval expected by Sept. 24.
The updated guidance also establishes more standardized requirements for participating manufacturers, including manufacturer-funded technology platforms, real-time rebate reporting, standardized claims submissions, 10-day payment timelines for complete rebate claims and a formal appeals process for denied claims. HRSA also significantly limits the reasons manufacturers may deny rebate requests and requires manufacturers to report denied claims so the agency can monitor patterns and intervene when appropriate.
Several of these provisions reflect concerns raised by hospitals and other stakeholders during the public comment period.
Congress Reopens the Broader 340B Debate
At the same time, Congress has launched multiple bipartisan efforts examining broader questions about the future of the 340B program.
In June, Senate Health, Education, Labor and Pensions Committee Chairman Bill Cassidy released a discussion draft seeking stakeholder input on potential reforms. More recently, bipartisan lawmakers introduced both the SECURE 340B Act in the House and the SUSTAIN 340B Act in the Senate.
While the proposals differ significantly in their approaches, they collectively address issues such as patient eligibility, contract pharmacy arrangements, program integrity, transparency and federal oversight. Together, they illustrate growing bipartisan interest in revisiting how the 340B program operates and whether statutory changes are needed to address challenges that have emerged over the program's three decades of growth.
Providers Continue to Raise Concerns
Despite HRSA's revisions to the rebate pilot, provider organizations continue to express concern about replacing upfront 340B discounts with post-purchase rebates.
In a statement following the agency's announcement, American Hospital Association President and CEO Rick Pollack said the revised pilot "will force hospitals in rural and other underserved communities to spend more on bureaucracy and less on the services and care that patients depend on every day."
Provider organizations argue that a rebate model could increase administrative responsibilities, create additional operational complexity and create cash-flow challenges for safety-net providers. Those concerns formed the basis of the legal challenges that delayed HRSA's original proposal and remained a central theme during the agency's public comment process.
HRSA, meanwhile, maintains that the revised pilot builds on existing claims infrastructure and that standardized reporting requirements, manufacturer-funded technology platforms and implementation safeguards will help minimize administrative burden while strengthening program integrity and duplicate-discount prevention.
What to Watch
Taken together, the recent actions by HRSA and Congress suggest that the 340B program has entered one of its most active periods of federal policy debate in years.
In the near term, manufacturers will prepare participation plans for the revised rebate pilot while HRSA finalizes implementation guidance. At the same time, Congress will continue considering legislative proposals that could reshape different aspects of the program over the longer term.
Although it remains unclear which proposals, if any, will ultimately become law, hospitals, federally qualified health centers and other 340B covered entities should expect continued discussion about the future of the program as policymakers weigh competing priorities around access, affordability, transparency and program integrity.
