The American Hospital Association is again pressing CMS to require drugmakers to provide negotiated Medicare drug prices upfront rather than through retrospective rebates. The group filed comments Aug. 17 on a CMS proposed rule that would codify requirements for the Medicare Drug Price Negotiation Program beginning in 2029.
The AHA’s central recommendation is that CMS require manufacturers to make the negotiated maximum fair price available at the point of sale for all eligible drugs, rather than allowing retrospective rebates or post-sale reconciliation. The group said a rebate-based approach would create administrative burdens for hospitals, particularly rural, critical access and safety-net facilities that lack the staff or systems to track and reconcile claims while awaiting reimbursement.
The AHA also warned that a retrospective model could lay the groundwork for a similar rebate-based shift in the 340B drug pricing program. HRSA has estimated such a model would cost 340B covered entities more than $500 million annually, a figure the AHA said likely understates the true cost.
That warning follows months of back-and-forth between hospitals and HRSA over 340B rebates. HRSA’s original 340B Rebate Model Pilot Program was set to launch Jan. 1, but a federal judge in Maine blocked it days before launch after the AHA and Maine Hospital Association sued, arguing HRSA violated the Administrative Procedure Act. The 1st U.S. Circuit Court of Appeals upheld the injunction, HHS dropped its appeal, and the pilot was vacated and sent back to HRSA. The agency then revised the pilot in July, creating a voluntary rebate pathway for a limited group of drugs. Manufacturer plans are due Aug. 24, with approved plans set to take effect Jan. 1, 2027. Hospital groups have continued to oppose the revised approach.
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