The 340B Drug Pricing Program provides essential savings on outpatient drugs for rural providers serving vulnerable populations who may lack insurance or be low income. For many rural safety-net hospitals operating on thin financial margins, the funds distributed through this program are essential to maintain operations and service lines. Rural provider participation, through safety net entities including critical access hospitals, sole community hospitals, rural referral centers, qualifying rural acute care hospitals, and federally qualified health centers comprise a small component of the overall program spending, but has a significant impact on rural health systems and patients.   

On August 3, 2026, the Health Resources and Services Administration’s (HRSA) released a notice to announce the 340B Rebate Model Pilot Program, which provides a rebate mechanism through which qualifying drug manufacturers may effectuate the 340B ceiling price for certain drugs sold to covered entities. The Pilot Program is set to take effect January 1, 2027, and would change how rural providers, facilities, and other covered entities receive 340B discounts for certain drugs. 

The rebate model would create significant financial and administrative challenges for rural providers. Rather than receiving the discount at the point of purchase, covered entities would pay full price upfront for certain drugs and wait to be repaid through a manufacturer-run rebate process. This model presents a cash flow burden that many participating rural hospitals and clinics are not positioned to absorb. Upfront discounts have allowed rural covered entities to effectuate the program’s purpose of stretching scarce federal resources and expanding access to care. Shifting that risk onto providers threatens the savings that keep services like obstetric, behavioral health and general survey availability in rural communities. NRHA urges Congress to pass legislation that would delay implementation of a rebate model pilot program.

• H.R. 10770, 340B Rebate Model Delay Act, Reps. Bresnahan (R-PA), Dingell (D-MI), Mann (R-KS), and Frankel (D-FL). This would delay the proposed 340B Rebate Model Pilot Program for two years, allowing Congress time to consider recently introduced bipartisan, comprehensive 340B reform bills.

Please find NRHA’s letter to HRSA on the implementation of the 340B Rebate Model Pilot Program here and NRHA’s letter to Congress on broader 340B program reform here.