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HRSA discloses manufacturers approved for revised 340B rebate pilot

2 weeks ago
in Health News
Reading Time: 3 mins read
HRSA discloses manufacturers approved for revised 340B rebate pilot
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Dive Brief:

  • The Trump administration has released a highly anticipated list of 10 drugmakers that it will allow to shift discounts on drugs from upfront savings to back-end rebates in a controversial federal program.
  • Starting Jan. 1, major pharmaceutical companies including AbbVie, Merck and Pfizer will only have to pay savings to providers participating in the 340B drug discount program after they verify the transaction qualifies, according to the Health Resources and Services Administration, the HHS subagency that oversees 340B.
  • HRSA greenlit rebate plans from more manufacturers — and for more drugs — than during its previous attempt to get a 340B rebate pilot off the ground. The expansion is sure to upset hospitals and other 340B providers, which vehemently oppose changes to 340B’s payment structure and argue drugmakers’ concerns about fraud and waste in the program are overblown.

Dive Insight:

It’s HRSA’s second attempt to kickstart a 340B rebate program, after the first was blocked by a judge in a case brought by hospital groups last year. This summer, the agency announced a revised pilot, and now has disclosed a full list of which medications made the cut.

HRSA greenlit 340B rebate plans for 21 drugs

Approved manufacturer 340B rebate model plans

The list has significant overlap with HRSA’s original approvals last fall, including Abbvie’s Imbruvica, Amgen’s Enbrel, AstraZeneca’s Farxiga, Bristol Myers’ Eliquis, Merck’s Januvia and Boehringer Ingelheim’s Jardiance.

Though, it includes 21 drug approvals to last year’s 14. Regulators OKed additional drugs from previously approved manufacturers, along with medications from new entrants, including Astellas Pharma, GlaxoSmithKline, Pfizer and Teva.

Industry watchers expected more drugs to be approved, after HRSA expanded the scope of the program in its second go-round. Previously, only products subject to the Medicare price negotiation this year were eligible to be included.

Johnson & Johnson and Novo Nordisk got drug rebate plans approved last year but are not on the updated list. Healthcare Dive has reached out to the companies for commnet.

The rebate pilot is meant to assuage concerns from drugmakers and some lawmakers that hospitals and their pharmacies are profiteering off the decades-old drug discount program.

340B is meant to give needy safety-net providers reliable access to expensive prescription drugs. But spending in the program has snowballed, driving calls for increased oversight into how the providers are taking in and spending dollars from the program.

Drugmakers say they’re particularly concerned that hospitals may be double-dipping on discounts in other programs like Medicaid. Many manufacturers have tried to unilaterally impose 340B rebates with little success. But they’ve have found an ally in the second Trump administration, which has made addressing fraud and waste in federal programs one of its central concerns.

Under the pilot, 340B providers will purchase drugs through their wholesaler account and request rebates on the drugs when they’re dispensed to eligible patients, instead of receiving the discount when buying the drug.

Providers will have to disclose data to back up a dispensed drug’s eligibility for 340B savings, including the claim number, the prescriber’s ID and the ID of the 340B provider, to an IT platform called Beacon.

Beacon will then verify eligibility, including that a drug was dispensed at a 340B-eligible location and the claim was submitted on time, before participating drugmakers issue rebates amounting to the difference between the wholesaler price and the lower 340B price.

Once approved, drugmakers have to pay rebates within 10 days. Any companies that frequently delay payments could have their rebate model approval revoked, and drugmakers aren’t allowed to deny rebates for evidence about drug diversion or duplicate discounts, according to HRSA. Instead, they have to raise those concerns directly with regulators.

Still, hospitals worry that drugmakers will find any excuse to deny valid rebates in order to avoid shelling out discounts, which can be generous — often 25% to 50% off the list price of a drug.

Some of the drugs that will be subject to rebates drive hundreds of millions if not billions of dollars in revenue for their parent companies. For example, Bristol Myer’s blood thinner Eliquis is the company’s top seller, with $10.2 billion in U.S. sales last year — more than 30% of the drugmaker’s total revenue in the states.

Revenue for the products could increase further if their 340B discounts decline, one reason why drugmakers have lobbied heavily and filed lawsuits to curtail the program.

The pilot program is slated to run for at least a year. HRSA expects to release a performance evaluation by April 30, 2028.

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