Hospital groups are asking HHS to give stakeholders more time to weigh in on a potential overhaul of the 340B drug pricing program, warning that the current 30-day comment period isn’t sufficient to evaluate how a shift from upfront discounts to post-sale rebates would affect hospital operations and patient access.
Five things to know:
1. In a Feb. 19 letter to HHS officials, several major hospital groups — including the American Hospital Association and Association of American Medical Colleges — asked the agency to extend the comment period through April 20. The current deadline is March 19.
“The 30-day comment period does not afford stakeholders sufficient time to gather information and provide complete answers to those dozens of detailed questions,” the groups wrote. “In fact, it will be almost impossible for 340B hospitals to comprehensively gather the ‘facts, research, and evidence’ that [the Health Resources and Services Administration] has asked stakeholders to provide in their comments.
2. HHS has signaled it may revisit designs for a 340B rebate pilot after courts blocked the original plan. On Feb. 13, HRSA issued a request for information to gather feedback on whether and how to pursue a rebate‑based model. The agency first proposed the concept in August 2025, under which hospitals would pay full price for certain 340B drugs and receive post‑sale rebates from drugmakers.
The proposal was challenged in court by the American Hospital Association and several safety-net providers. A federal judge halted implementation in December, just before the pilot’s Jan. 1, 2026, start date, siding with hospitals that argued the model would disrupt longstanding purchasing workflows and drive up drug costs for safety-net providers. The 1st U.S. Circuit Court of Appeals declined to lift the block. In early February, HHS agreed to vacate the pilot and remand it to HRSA, paving the way for a fresh administrative process.
3. Hospitals estimate that a rebate approach would cost them hundreds of millions of dollars annually. The AHA and other groups have argued that eliminating upfront discounts would create cash flow issues, delay access to medications, and threaten services in rural and underserved areas. In their lawsuit, they also argued the model would increase administrative burden and leave hospitals financially responsible for delays in rebate payments.
4. Any future rebate pilot would require a new public notice, a fresh comment period and a delayed effective date of at least 90 days. The current request for information is intended to guide the agency’s next steps and assess the feasibility of a rebate-based approach.
5. Established by Congress in 1992, the 340B program requires drug manufacturers participating in Medicaid to offer steep discounts on outpatient drugs to eligible providers. In recent years, drugmakers have sought to limit those discounts or move to rebate models — a shift that has sparked legal challenges and drawn bipartisan criticism from lawmakers.
