For more than a year, major drugmakers have been pushing to replace the 340B program’s longstanding upfront discount structure with post-sale rebate models — drawing resistance from hospitals and federal regulators at every stage. What started as four lawsuits in late 2024 has since expanded into a federal pilot program, a new wave of enforcement actions, and an unresolved legal battle still working through the courts. Here is a timeline of 15 key developments since the lawsuits were filed.
1. Johnson & Johnson announced plans to end upfront discounts for two drugs — blood thinner Xarelto and anti-inflammatory Stelara — sold to disproportionate-share hospitals under the 340B program on Aug. 23, 2024. The new rebate system would require hospitals to buy the drugs at commercial prices, then submit claims data via an online portal to qualify for a rebate.
2. The AHA, ASHP and others condemned the model, arguing it violates the 340B statute and would put financial strain on safety-net hospitals. J&J ceased implementation of its rebate plan Sept. 30 after HRSA warned that drug rebates are illegal under the 340B statute and threatened the drugmaker with fines or loss of Medicaid and Medicare Part B eligibility.
3. On Nov. 12, J&J filed suit against HHS and HRSA, asking a federal judge to declare its rebate plan legal and block enforcement. Two days later, Lilly filed a similar suit over its own rebate model, which would require hospitals to pay full price upfront and receive weekly cash rebates.
4. On Nov. 22, Sanofi notified 340B hospitals it would roll out a credit model requiring hospitals to pay wholesaler acquisition cost and submit claims data to a third-party tool before receiving a credit for the 340B difference. Bristol Myers Squibb also filed against HRSA Nov. 26, requesting its own 340B rebate plan be declared lawful. On Dec. 13, HRSA sent a warning letter to Sanofi urging it to halt its credit model. Sanofi paused implementation and on Dec. 16 filed its own federal suit challenging HRSA’s position.
5. U.S. District Judge Dabney Friedrich of the D.C. District Court denied summary judgment motions from Lilly, Bristol Myers Squibb, Novartis and Sanofi in May 2025, upholding HRSA’s authority to require pre-approval of rebate models. Sanofi received a partial win — the court ordered HRSA to reconsider its denial of Sanofi’s model — but Sanofi still cannot implement it unilaterally.
6. A second federal judge reached the same conclusion in J&J’s separate lawsuit, ruling that HRSA has statutory authority to provide for “discounts, rebates, or both” under the 340B statute. Both BMS and Novartis appealed the May ruling; J&J’s case also remains on appeal. The D.C. Circuit heard oral arguments on the consolidated cases Nov. 17, 2025; a ruling has not been issued.
7. In a significant reversal from its prior position that rebates were categorically prohibited, HRSA announced a voluntary rebate model pilot limited to drugs subject to Medicare’s Maximum Fair Price negotiations under the IRA. The agency approved eight manufacturers for nine drugs — including BMS, AstraZeneca, Novo Nordisk and Janssen — all using the Beacon platform, with a Jan. 1, 2026, launch date.
8. The AHA, Maine Hospital Association and four safety-net hospitals filed suit in U.S. District Court in Maine in December 2025, arguing the pilot violated the Administrative Procedure Act. On Dec. 29, Judge Lance Walker issued a preliminary injunction halting the program days before its Jan. 1 launch, finding the AHA had shown likely success on the merits.
9. On Jan. 7, the 1st U.S. Circuit Court of Appeals declined to lift the injunction. HHS reviewed the administrative record and, on Feb. 5, said further litigation would not alter the likely outcome. HHS agreed to drop its appeal, and on Feb. 10, the Maine court vacated the pilot and remanded it to HRSA to reassess the framework. ASHP Vice President of Government Relations Tom Kraus called the pilot “unworkable and a threat to program integrity.”
10. On Feb. 13, HRSA published an RFI in the Federal Register seeking stakeholder input on whether and how to pursue a rebate-based model. Hospital groups including the AHA and AAMC asked HHS to extend the 30-day comment window, which was ultimately extended to April 20. The AHA used the comment period to urge HRSA to abandon the rebate model entirely, arguing it would cost hospitals more than $1 billion annually. HRSA has not responded publicly.
11. Bristol Myers Squibb and Novartis are appealing the May 2025 district court ruling. J&J’s case also remains on appeal. The underlying legal question — whether and under what conditions HRSA can approve manufacturer rebate models — is not yet resolved at the appellate level.
12. Separate from the rebate litigation, Eli Lilly has also been pushing a parallel enforcement strategy around claims-level data. In January, Lilly expanded its existing contract pharmacy data requirement to include in-house pharmacy dispensing, citing the need to identify duplicate discounts under the IRA, and gave covered entities until Feb. 1 to comply. Novo Nordisk announced a similar in-house claims-data requirement effective April 1. The AHA called that policy illegal as well, urging HRSA to block it before it took effect.
13. On June 1, Lilly sent letters to an initial group of noncompliant hospitals giving them five business days to begin submitting claims-level data or face suspension of 340B pricing. The company said roughly 70% of covered entities purchasing Lilly drugs — about 2,350 organizations — had already complied, generating nearly 800,000 claims records since Jan. 1. Two-thirds of critical access hospitals are among those compliant.
14. The AHA called the policy unlawful and urged HRSA to take enforcement action against Lilly. 340B Health President and CEO Maureen Testoni called it “a huge kick in the face to the nation’s safety-net hospitals.” Lilly has indicated it will extend enforcement to additional covered entities in the weeks ahead.
15. Tampa General (Fla.) Hospital became the first hospital to challenge Lilly’s enforcement push in court, suing Lilly and Lilly USA July 2 in the U.S. District Court for the Middle District of Florida, alleging the drugmaker’s decision to cut off its 340B pricing access violates Florida’s Deceptive and Unfair Trade Practices Act. According to the complaint, Lilly directed wholesaler McKesson to end Tampa General’s 340B discounts June 18 after the hospital missed the five-business-day deadline set in Lilly’s June 1 letter, triggering an overnight price jump on Mounjaro from $750.52 to $1,019.74 per unit, a 35.9% increase. The complaint cites similar spikes on Humalog and Verzenio, and says the price differential now totals roughly $2,058,572 a month above the statutory ceiling price, an estimated $24.7 million annually.
Where things stand
The upfront 340B discount structure remains in place for all drugs that were part of the now-vacated pilot. Covered entities should continue receiving those discounts without any rebate workflow. But the IRA duplicate discount problem that drove the pilot in the first place remains unresolved, HRSA is developing a revised rebate framework, the appellate courts have not yet weighed in on the central legal question, and Tampa General’s suit adds a new state-law front to the fight over Lilly’s claims-data enforcement.
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