340B Program Reform: What Rural Hospitals Need to Know
What’s happening
The 340B program continues to be a focus among federal health policymakers. Members of Congress recently introduced bills and legislative drafts proposing to reform the 340B program, and the Health Resources and Services Administration (HRSA) announced a final 340B rebate model pilot program.
Of interest
In the House, Reps. Peters (D-CA) and Joyce (R-PA) introduced the SECURE 340B Act in early July. Senate Health, Education, Labor, and Pensions Committee Chair Cassidy (R-LA) released a discussion draft to reform 340B, while the Senate “Gang of Six” (Sens. Kaine (D-VA), Moran (R-KS), Baldwin (D-WI), Capito (R-WV), Hickenlooper (D-CO), and Boozman (R-AR)) introduced the SUSTAIN 340B Act. The bills and drafts would take different approaches to reform but all would:
Define “patient”
Require additional reporting by covered entities
Establish or expand HHS audit authority
Increase requirements related to contract pharmacies
The SECURE 340B Act and SUSTAIN 340B Act also would block HRSA from implementing or expanding the rebate model, which HRSA announced in late July. The model would create an alternative to the historic upfront 340B discount model under which covered entities can obtain discounted 340B pricing at the time of purchase. Under the rebate model, certain manufacturers will be able to provide certain drugs at the 340B ceiling price using a post-purchase rebate model.
Our partners at McDermott, Will, & Schulte (MWS), one of healthcare’s most trusted and respected healthcare law firms, wrote an analysis of the HRSA 340B rebate model pilot program.
Why you should care
Many rural hospitals and health systems rely on and benefit from the 340B program. The rebate model, effective January 1, 2027, will impact drugs selected for the 2026 and 2027 Medicare Drug Price Negotiation Program (MDPNP) cycles. In addition, proposed legislative changes have the potential to overhaul the 340B program and could increase administrative or financial burdens on and reduce financial advantages for hospitals and health systems.
Looking to learn more?
MWS offers valuable insights into why these developments are important and what rural hospitals and health systems should include in their responses. Read more to see what they are saying about how your organization could be impacted by the rebate model.
Click here to read the MWS insight.