HRSA Flips The 340B Script: From Discount to Rebate

Picture this: It's Monday morning, and you're walking into your CFO's office to explain that your pharmacy budget just exploded by millions—not from poor planning or a supply chain collapse, but because HRSA (Health Resources and Services Administration) just rewrote thirty years of 340B economics with four months' runway for covered entities. 

Unfortunately, this isn’t a hypothetical—it’s becoming the new reality for health systems and hospital pharmacies nationwide.

Sweeping Reform Could Wipe Away Budgets

For three decades, 340B worked like a simple grocery store coupon. You had ten dollars worth of items, used a two-dollar coupon, and spent only eight dollars. Straightforward savings. Predictable returns. Budget certainty you could bank on.

On July 31, 2025, HRSA's Office of Pharmacy Affairs (OPA) announced a proposed 340B Rebate Model Pilot Program. This pilot, set to begin on January 1, 2026, will involve select drug manufacturers and ten drugs listed on the CMS (Centers for Medicare & Medicaid Services) Medicare Drug Price Negotiation Selected Drug List. Under this model, participating covered entities will now purchase these drugs upfront at non-discounted GPO or WAC prices, and then later submit a claim for a post-purchase rebate that will bring the net cost back down to what the 340B ceiling price would have been.

Over the past few weeks since the pilot announcement, my email inbox has seen a flurry of activity from colleagues and covered entity partners trying to make sense of this monumental 340B shift.

I want to take a moment to clarify some key aspects of the pilot program, provide some steps and immediate actions you can take to mitigate risk, and share a helpful new 340B tool that can pinpoint your hospital’s exposure under the proposed pilot program.

HRSA, A Pilot, And Representative 340B Sampling Walk Into A Bar

The bartender says, "Table for two?" 

I'll admit it—when HRSA announced the first-ever 340B pilot program, I was genuinely excited. After working nearly two decades in the 340B space, it felt like a watershed moment. But as I read through the announcement, my excitement turned to cautious skepticism. Something was amiss. 

The ten drugs chosen for the pilot program weren’t selected purposefully for their 340B relevance—they're the same medications that Medicare is already negotiating under the Inflation Reduction Act. HRSA essentially looked at an existing policy disruption and decided to piggyback on it with a January 2026 launch date. Smart from a logistics standpoint, but it raises serious questions about the pilot's scope and true purpose.

Here’s where things get problematic. To claim a rebate in HRSA’s new pilot program, covered entities will need to submit the following data forty-five days from the date the drug is dispensed:

Any hospital pharmacist will tell you these are retail pharmacy billing identifiers that you'd never see in an inpatient ward or infusion center. All ten drugs are specifically described as those "dispensed through community/contract pharmacies," yet the way HRSA is positioning this announcement, you'd think they were stress-testing the entire 340B framework. It's like announcing a comprehensive vehicle safety test, then only checking if the radio works. 

The bigger issue? This creates significant administrative and budgetary burdens for covered entities while solving none of the real operational challenges in 340B

Beyond Budgets:  The Real Cascading Impact

The impact of this pilot program creates a perfect storm of financial and operational challenges that will ripple through every level of hospital operations:

The Cash Flow Crunch: Hospitals will front millions in payments while waiting weeks for manufacturer rebate checks. That new MRI machine gets pushed to next year, the much-needed IT infrastructure upgrade goes on hold, and the facility expansion that would have improved patient flow? Suddenly those aren't budget priorities anymore—not when hospitals are hemorrhaging cash waiting for rebates that may or may not arrive on time.

The Administrative Avalanche: Each rebate claim requires navigating different manufacturer IT platforms, entering eleven data fields that must be perfect every time, and reconciling payments against submissions to catch underpayments and processing errors. One missed digit means delays, resubmissions, and extended cash-flow gaps. 

The Workflow Disruption: Hospital pharmacy teams must now become rebate detectives, tracking money trails and maintaining documentation that links payments to rebate receipts for audit readiness. It's a fundamental shift from point-of-purchase savings to post-purchase accounting—transforming pharmacy operations into quasi-billing departments.

Even the most well-staffed covered entities will feel the strain from these administrative demands, while smaller organizations may opt out of 340B savings entirely by leaving these drugs out of their program.

Your Action Plan: What To Do Next

Here's the critical message for leadership: 340B isn't a pharmacy program—it's a hospital program. Pharmacy handles the operational mechanics because it involves medications, but the hospital earns 340B status and bears ultimate responsibility.

Successfully navigating this pilot requires immediate C-suite engagement. Here are actionable steps to help your team stay compliant, protect hospital revenue, and give you a clear view of the new rebate reality:

• Know the impact of 340B as a whole for each of your hospitals or specific manufacturers. This data can be used to advocate for the value of 340B before public commenting deadlines and help you prepare for additional pilots in the future.
• Know the pilot’s financial impact either by doing your own calculations or with QuicksortRx’s 340B Rebate Pilot report.
• Proactively bring this data to leadership to a on cash-flow restructuring and budget implications.
• Activate 340B oversight committees with compliance, risk management, and quality departments.
• Update policies and procedures for the potential new rebate reality.
• Review audit history to anticipate additional rebate model challenges.

Get Your 340B Exposure Report

Rather than guess at your hospital's vulnerability, QuicksortRx can get you concrete data now. Over the weekend following the pilot announcement, our team built a comprehensive 340B Rebate Pilot Report that pinpoints your exact exposure under the proposed rebate model. 

Most importantly, the report gives you the data you need to support more informed conversations across pharmacy and finance teams—today, not months from now. 

Want to see your real WAC exposure before rebates hit? 

Click here to request your free, customized 340B Rebate Pilot Report.

By Jason Mills, PharmD, MBA—Pharmacy Account Specialist at QuicksortRx. Learn more about Jason here.