HRSA approves first nine drugs for 340B rebate model pilot

The US Health Resources and Services Administration (HRSA) has approved nine drugs for a pilot testing a new rebate model under the federal 340B drug discount program: a move that follows years of friction between hospitals and drugmakers over pricing practices.

The pilot, due to begin on January 1, 2026, will allow participating hospitals to purchase medicines at wholesale acquisition cost and later apply for manufacturer rebates. HRSA said the pilot aims to explore a “fair and transparent” approach consistent with the 340B statute and broader administration goals.

The model follows a wave of lawsuits from drugmakers including Johnson & Johnson (NYSE: JNJ), Eli Lilly (NYSE: LLY) and Bristol Myers Squibb (NYSE: BMY), who argued that hospitals abuse upfront discounts by profiting from inflated reimbursements. A federal judge ruled in May that HRSA must first approve any company rebate plan before it takes effect, prompting the agency to formalize this pilot process.