NATIONAL HOSPITAL AND PHARMACIST ASSOCIATIONS URGE CONGRESS TO STOP HARMFUL 340B REBATE PILOT PROGRAM
WASHINGTON, D.C.— Late yesterday, the nation’s leading hospital and pharmacist associations called on both Congress and the federal courts to stop the administration’s 340B rebate program from taking effect on Jan. 1, 2026. In a joint letter to congressional leaders and an amicus brief filed in federal court, the organizations warn the 340B rebate program would upend more than three decades of established 340B operations and impose significant financial and administrative burdens on safety-net hospitals.
Under the rebate program, nine major drug companies would require 340B hospitals to pay elevated commercial prices upfront for 10 high-cost outpatient drugs, then force those hospitals to seek reimbursement through a complex rebate process. The associations warn that the program would force safety-net hospitals to float millions of dollars to profitable drug companies, creating substantial financial strain. 340B Health survey data cited in the letter show the average annual “float” would be $8.6 million per hospital, and up to $37.2 million for large hospitals diverting resources away from services for low-income and rural patients.
“The rebate program is a fundamental shift away from the long-standing upfront discount model that safety-net hospitals rely on to provide essential services,” said Maureen Testoni, president and CEO of 340B Health. “The rebate program forces hospitals to act as interest-free lenders to drug companies, jeopardizing hospitals’ financial stability and threatening access to critical care. Under this approach, hospitals would be required to purchase certain drugs at commercial prices, submit extensive claims data to manufacturers’ third-party vendors, and wait to be reimbursed at a time when many are already struggling to stay open.”
“The cash-flow disruption, administrative burden, and uncertainty built into the rebate program would directly reduce hospitals’ ability to provide free and discounted medications, sustain underpaid services, and support care for low-income and rural communities. We are urging congressional leaders and the federal court to help stop this program before it causes significant damage to the nation’s health care safety net.”
Contact: Jon Tilton at jon.tilton@340bhealth.org or 202-536-2285