by Lidia Rodriguez-Hupp, Chief Customer Officer
July 31, 2026
Well, that was fast.
A little over two weeks after wrapping up public comments on its contention that complying with 340B rebates would require just five hours of additional administrative time per week, HRSA turned around and dropped its newly revised pilot plan for 340B rebates starting Jan. 1, 2027.
It’s astonishingly quick work from a bureaucratic government agency, and it suggests there are powerful and influential operatives inside HRSA or the Department of Health and Human Services who have their sights set on turning 340B on its head. The White House Office of Management and Budget concluded its regulatory review of the rebate pilot program only three days earlier, and HRSA has yet to even publish any of the public comments it received.
Next step is for drugmakers to submit their rebate plans by Aug. 24, with approvals expected within a month of that deadline — though this rubber-stamp version of HRSA suggests that is a mere formality. Lots more to come on this topic.
A simmering summer boil
It adds to an incredibly busy and consequential summer for the 340B program. So much for the sleepy 340B dog days of summer of old.
The 340B program has become a lightning rod, and we are witnessing perhaps the most litigious era in the program that I can remember over my 20-year-plus career. My last count has us close to 100 lawsuits surrounding the program, and drugmakers appear willing to stop at nothing to bend 340B to their will.
At least there’s some good news from Arkansas, where Attorney General Tim Griffin, a Republican, filed suit July 22 against 13 drugmakers and Second Sight Solutions, which operates the 340B ESP and Beacon platforms, alleging they violated state law by restricting access to 340B discounts.
Arkansas, you will recall, was the first state to enact a contract pharmacy access law in 2021. It’s now the first state to go to court to enforce such a law.
“Since Act 1103’s passage, drug manufacturers have failed to comply with its explicit terms for contract pharmacies and instead, actively undermined those protections,” Griffin said in a statement. “Through a series of burdensome and unlawful restrictions, they reduced healthcare providers’ access to 340B savings and the resources available to serve Arkansas patients.”
In a news conference, Griffin said he had found more than 300,000 alleged violations, with a $10,000 fine for each.
“I expect this will be a billion-dollar case ultimately,” he said, adding that he expects more states to follow his lead.
Godspeed to that.
Meanwhile, Big Pharma has been making plenty of hay out of the news, reported by HRSA, that 340B spending reached $100 billion in 2025, up 23% year over year, citing it as proof the program is supposedly out of control.
While there are plenty of ways to dismantle that argument, I’ll offer this: Let’s say 60% of that $100 billion in spending, or $60 billion, comes back to covered entities via 340B benefits. What happens to the healthcare safety net if those savings — which, importantly, do not involve taxpayer funds — disappears? That’s exactly the intent of 340B — to cost taxpayers nothing. Does Big Pharma have a remedy for that?
On Capitol HIll, the latest legislative attempt at “modernizing” the program is the SECURE 340B Act, introduced by U.S. Reps. John Joyce (R-Pa.) and Scott Peters (D-Calif.). Among other things, it would pause any 340B rebate models for four years until lawmakers create a new definition of an eligible patient and determine new standards for contract pharmacies, data sharing and transparency. It would also establish a neutral federal clearinghouse to manage prescription data and verify claims.
The bill has elicited mixed reactions from covered entities. Its prospects are probably dim in a midterm election year and with Congress facing a quickly dwindling number of remaining work days.
The last big development is a real bummer: CMS has proposed slashing 340B reimbursements under Medicare Part B by 37% — from average sales price plus 6% to ASP minus 33.4% — starting next year.
The Trump administration took its cues from the Supreme Court, which ruled in 2022 that its 28.5% cut in 340B Part B payments was illegal on procedural grounds, and followed protocol this time around by surveying hospitals on their Medicare drug acquisition costs. So we all knew this was coming, but still.
Rebates updates
- A Washington D.C. federal appeals court ruled that HHS has the authority to approve or deny rebate plans before manufacturers implement them. The ruling affirmed two lower-court rulings and lent another legal blow to the drug industry. But the three-judge panel ruled against 340B Health’s contention that the statute categorically prohibits rebates.
- As we did twice previously, The Craneware Group submitted comments to HRSA on its estimated burden of gathering data for its rebate pilot. We pointed out the challenges of obtaining the information manufacturers are seeking — including the complex process hospital-administered drugs undergo before presenting as complete and the sprawling, disparate systems that contain the requested data.
340B reporting
- CMS is proposing to make 340B reporting a mandatory part of its Medicare Part D data repository starting in 2027, part of complying with the Inflation Reduction Act requirement to issue rebates when the cost of drugs rises faster than the rate of inflation.
- Speaking of reporting, the House Ways and Means Committee approved a bill that includes a measure requiring certain tax-exempt hospitals to include 340B data in federal tax forms. It would not apply to critical access hospitals or rural emergency hospitals, suggesting it may be about applying greater scrutiny to urban hospitals that use a rural designation for 340B.
Manufacturer restrictions
Drugmakers continue to feel emboldened to unilaterally place restrictions on 340B transactions, though not without some pushback.
In the U.S. House, 72 members signed onto a bipartisan letter spearheaded by Reps. Doris Matsui (D-Calif.) and Jack Bergman (R-Mich.) urging HHS to take action against Eli Lilly for cutting off 340B pricing to entities that don’t comply with its demands for extensive medical and prescription claims from in-house and retail pharmacies.
Two hospitals — Florida-based Tampa General Hospital and Mary Hitchcock Memorial Hospital in New Hampshire — have now sued Lilly for cutting off 340B pricing. Neither covered entity minces words in its respective complaint. Tampa General says Lilly’s move could cost it nearly $25 million annually.
“Lilly has abused its market power through the institution of an illegal policy with non-negotiable terms, false representations and retaliatory pricing penalties in order to extract commercially valuable data from MHMH and to line its own pockets with ill-gotten gains,” Mary Hitchcock Memorial says in its lawsuit.
Well put.
Meanwhile, Novartis became the 13th manufacturer to follow Lilly’s lead to expand their data requirements to in-house pharmacies, while California-based Cytokinetics became the 44th drugmaker to limit contract pharmacy access.
Other 340B news
Speaking of Novartis, a federal appeals court rejected their attempt to block Missouri from enforcing its contract pharmacy access law while the full case proceeds at the district court level.
A federal court meanwhile blocked North Dakota’s request to pause enforcement of an April ruling that ruled its contract pharmacy access law was unconstitutional. The state had cited the Missouri ruling, but the court said North Dakota’s law was different because it carried criminal penalties and attempted to regulate pricing, rather than pharmacy delivery.
Last but not least, four health systems (and counting?) have now sued CVS Health and its affiliates for diverting 340B savings.
The latest lawsuit came from Detroit-based Henry Ford Health, following complaints filed in May from the University of Michigan, University of Kansas Hospital and New York-based Mt. Sinai. All allege the vertically integrated behemoth conspired to withhold program savings owed to hospitals by using its Wellpartner subsidiary to identify 340B claims. Henry Ford says CVS’ actions have cost it more than $29 million between 2020 and 2025.
Enjoy the rest of your summer, and try to find ways to break away from the madness.
If you’d like to continue this conversation, please contact me at [email protected].