HRSA Approves 340B Rebate Models, Reshaping Drug Discounts and Hospital Financing

The Health Resources and Services Administration (HRSA) has approved 8 pharmaceutical manufacturer proposals to issue rebates under the 340B Drug Pricing Program, marking a significant departure from the long-standing model of upfront discounts that providers have relied upon for decades. The move, revealed on October 30, has drawn sharp criticism from hospital associations and safety-net providers who say the new structure benefits drugmakers at their expense.

The approved proposals come from several major drug manufacturers, including Bristol Myers Squibb, Johnson & Johnson, Amgen, AstraZeneca, Merck, Boehringer Ingelheim, Novo Nordisk, and AbbVie’s Pharmacyclics. The program will cover some of the most widely prescribed—and lucrative—medications in the US, including Eliquis, Stelara, Enbrel, Farxiga, Imbruvica, Januvia, Jardiance, and a suite of insulin products from Novo Nordisk.

Under the pilot program, set to begin January 1, 340B providers will purchase drugs at standard wholesale prices and then request rebates for eligible dispensed prescriptions. Providers will need to submit detailed claims data—including claim numbers, prescriber identifiers, and facility IDs—to a verification platform called Beacon. Once Beacon confirms eligibility, drugmakers will issue rebates equal to the difference between the wholesale and 340B prices within 10 days.

HRSA officials have positioned the rebate model as a step toward greater transparency and accountability, addressing long-standing concerns about fraud and misuse within the 340B system. Established more than 30 years ago, the 340B program was designed to help hospitals and clinics serving low-income or rural populations afford essential medications. However, regulators and pharmaceutical companies argue that the program’s rapid expansion has led to misuse and revenue diversion unrelated to patient care.

Hospital groups, however, say the change will undermine the financial foundation of the safety-net care system. By forcing providers to front the cost of drugs before receiving reimbursement, the new model could create severe cash flow challenges—especially for smaller facilities already operating on thin margins.

“Drug manufacturers are the only winners under these rebate models,” said America’s Essential Hospitals CEO Jennifer DeCubellis. “Hospitals now have to manage a whole new set of administrative burdens, requiring more bureaucracy and more paperwork, with no benefit to patients’ ability to access discounted drugs.”

The financial implications are substantial. Bristol Myers Squibb’s Eliquis generated $9.6 billion in US sales last year—accounting for 28% of its domestic revenue—while Johnson & Johnson’s Stelara brought in $10.4 billion, or roughly 12% of its total global sales. Many of the drugs included in the rebate pilot were also targeted for Medicare price negotiation, highlighting their importance in both clinical and fiscal terms.

While HRSA has left the door open to expanding the rebate model to additional drugs in the future, the pilot represents a pivotal moment for the 340B program. Hospitals warn that the administrative and financial hurdles could erode their ability to deliver care to vulnerable populations, while drugmakers see it as a long-overdue realignment toward program integrity.

Reference

Pifer R. HRSA approves 340B rebate models to hospitals’ chagrin. Healthcare Dive. Published October 31, 2025. Accessed November 3, 2025. https://www.healthcaredive.com/news/340b-rebate-models-approved-hrsa/804370/