The 340B Rebate Model Pilot is still scheduled to start January 1, 2027, but hospitals have asked a federal court to stop it. As of November 3, 2026, the court had not ruled on that request, and a decision could come any day before January 1. Covered entities should keep preparing for January 1 while watching for a decision.
What happened
On October 9, 2026, the American Hospital Association, the Maine Hospital Association and four safety-net hospitals sued HHS in federal court in Maine. They asked for a temporary restraining order to keep the pilot from starting on January 1.
The hospitals argue that HRSA broke the Administrative Procedure Act: it underestimated costs, didn't explain the pilot's benefits, skipped less burdensome options and ignored 30 years of reliance on upfront discounts. HRSA estimates the pilot will cost covered entities more than $537 million a year; hospital groups say the real cost is over $1 billion.
Drugmakers are now part of the case. AbbVie, Bristol Myers Squibb and Boehringer Ingelheim asked to join on October 14, and PhRMA followed on October 15. The hospitals objected, but on October 22 the judge let them in to defend the pilot. In the first case, the court had kept drugmakers out. Drugmakers argue the pilot is needed to stop duplicate 340B and Medicare negotiated-price discounts, which PhRMA estimates could reach $5.2 billion in 2027.
Other groups have sided with the hospitals. On October 29, the National Association of Community Health Centers and the National Primary Care Association Hub filed a friend-of-the-court brief, and the Greater New York Hospital Association filed another. Both ask the court to block the pilot before January 1. The health center groups say a rebate model doesn't fit how health centers work: their grant rules limit how much cash they can hold or borrow to cover higher up-front drug costs.
Congress is also involved. Three bipartisan House bills would stop or limit the rebate model. None has passed.
- The 340B Rebate Model Delay Act (H.R. 10770), introduced October 9, would push the rebate model back to 2029.
- The PROTECT 340B Act of 2026, introduced October 29 by Reps. Doris Matsui and Tracey Mann, would end the pilot before January 1. It would also stop PBMs and insurers from treating 340B covered entities unfairly and set up a clearinghouse to prevent duplicate discounts.
- The Safety-Net Provider Drug Pricing Protection Act (H.R. 10919), introduced October 29 by Rep. Jack Bergman, would let health centers, critical access hospitals, sole community hospitals, Ryan White clinics and several other grantee types keep paying the 340B price up front. It would not cover disproportionate share hospitals, freestanding children's and cancer hospitals, or rural referral centers.
Why this case looks familiar
The same court blocked HRSA's first rebate pilot three days before its planned January 1, 2026 start. The appeals court refused to lift that order, and the first pilot was vacated on February 10, 2026. HRSA then issued a revised pilot with a January 1, 2027 start and, on October 1, 2026, approved plans from 10 manufacturers. All 10 plan to use the Beacon platform.
| Date | What happened |
|---|---|
| Oct 29, 2026 | Health center groups and the Greater New York Hospital Association back the hospitals in court; PROTECT 340B Act and Bergman exemption bill introduced |
| Oct 22, 2026 | Judge lets AbbVie, BMS, Boehringer Ingelheim and PhRMA join the case |
| Oct 21, 2026 | Hospitals object to drugmakers joining |
| Oct 14 and 15, 2026 | Drugmakers and PhRMA ask to join the case |
| Oct 9, 2026 | Hospitals sue and ask for a restraining order; House delay bill introduced |
| Oct 1, 2026 | HRSA approves 10 manufacturers' rebate plans |
| Aug 3, 2026 | HRSA publishes the revised pilot, starting Jan 1, 2027 |
| Feb 10, 2026 | First pilot vacated |
| Dec 29, 2025 | Court blocks the first pilot |
What it means for covered entities
Until a court rules, plan as if the pilot starts January 1. Getting ready costs little if the pilot is blocked; being unready on January 1 could cost real cash.
- Finish Beacon registration and banking for every entity.
- Keep buying pilot drugs on your 340B account, not GPO or WAC accounts.
- Estimate how much extra cash you'll need when you start paying WAC up front.
- Decide who will submit claims and reconcile rebate payments.
No bill has passed, so even covered entities that a bill would exempt should keep preparing.
Our 2027 rebate pilot checklist walks through each step.
What it means for pharmacies
Medicare MFP refunds continue either way. Manufacturers can already reduce or withhold an MFP refund on a claim they flag as 340B. If the pilot starts, they'll get claim-level 340B data, and each manufacturer's plan sets how it handles claims that are both. Our MFP refund guide explains how to spot a missing or short refund.
How Secure340B can help
For covered entities: we estimate your January 1 cash-flow impact using your own purchasing data and get you ready for 340B Rebate Reconciliation. Start with the free 340B Rebate Readiness Quiz or see our services for covered entities.
For pharmacies: we reconcile your MFP refunds claim by claim, find the missing or short ones and work out why. Start with the free MFP Rebate Readiness Quiz or see our MFP reconciliation service.
For both: when a covered entity and its contract pharmacies agree on which claims are 340B, fewer MFP refunds get held up and fewer rebates get denied. We work with both sides to get there.
Information current as of November 3, 2026. This is general education, not legal advice. Sources: 340B Report, Oct. 22, 2026; America's Essential Hospitals; AHA motion for a temporary restraining order, Oct. 9, 2026; HFMA, Oct. 10, 2026; Becker's, Oct. 16, 2026; Pharmaceutical Commerce, Oct. 22, 2026; AHA News, Jan. 8, 2026; AHA News, Oct. 1, 2026; AHA letter on H.R. 10770, Oct. 15, 2026; 340B Report, Nov. 3, 2026; 340B Report, Nov. 2, 2026; 340B Report, Oct. 29, 2026; Becker's, Nov. 2, 2026.