The Health Resources and Services Administration has opened applications for a voluntary pilot program aimed at evaluating the 340B rebate model.
The 340B Program traditionally has offered up-front discounts to hospitals that served low-income and uninsured populations. Drugmakers are required to participate in the program to have their products covered under Medicaid and Medicare Part B.
Drug manufacturers Johnson & Johnson, Eli Lilly, Sanofi and Bristol Myers Squibb have previously attempted to implement payment models that required hospitals to submit claims to receive rebates for 340B drugs after paying commercial prices. The drugmakers argue their rebate plans will improve program transparency and ensure cost savings are passed on to patients.
According to a recent 340B Health survey, rebate models would place an average $72.2 million annual cost burden on disproportionate share hospitals.
“While we recognize the agency’s intent to test a limited rebate model tied to Inflation Reduction Act implementation, we remain deeply concerned about the financial and administrative burdens the rebate approach will place on 340B hospitals,” 340B Health said in a July 31 news release. “We will continue working closely with HRSA to ensure 340B remains strong, sustainable, and focused on protecting the safety net.”
Manufacturers of drugs on CMS’ Medicare Drug Price Negotiation Selected Drug List may submit plans to participate in the program, which will test the rebate model “in a methodical and thoughtful approach to ensure a fair and transparent 340B rebate model process,” the HRSA said in a July 31 news release.
Eligible drug manufacturers must submit prospective rebate plans to the agency by Sept. 15. If accepted, plans will go into effect for one year beginning Jan. 1, according to an Aug. 1 HHS notice.
Stakeholders have until Sept. 2. to submit public comments on the program to the Office of Pharmacy Affairs.
