"The 340B program allows hospitals to buy outpatient drugs at steep discounts, with the purported purpose of helping them fund care for low-income and uninsured patients. The now-axed rebate model would have invited drugmakers to participate voluntarily in a rebate-based discount system. Basically, instead of the provider receiving a discount upfront at purchase, the 340B discount would be applied after purchase via rebate - and subject to tedious data submission requirements."
"For instance, Bill Keeton - chief advocacy officer at Vivent Health, a nationwide provider of HIV care for low-income patients - told MedCity News in November that the model would create difficult cash flow problems for healthcare providers, especially organizations like his that have to buy HIV medications, which are incredibly expensive. Biktary, the most popular medication used to treat HIV, costs about $4,200 per month."
"The Department of Health and Human Services is scrapping the 340B Drug Pricing Program's rebate model, according to a Thursday court filing. Hospitals are reacting with glee, as the rebate model would have added administrative headaches and forced them to return millions in discounts. The model was slated to go live on the first of the year, but courts blocked implementation before it could take effect, citing procedural and legal issues."
HHS abandoned the planned 340B rebate model following legal challenges and court intervention. The rebate approach would have shifted discounts from upfront purchase price reductions to post-purchase rebates, requiring extensive data submissions and voluntary participation from drugmakers. That change threatened cash flow by forcing providers to temporarily front full drug costs, a particular strain for clinics buying very expensive HIV medications. The pilot aimed to prevent duplicate discounts and improve transparency but raised concerns about administrative complexity and disproportionate impacts on smaller safety-net providers. Multiple lawsuits, including one by the American Hospital Association, challenged the model's legality and implementation.
Read at MedCity News
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