Trump Administration Rewrites Its 340B Pilot to Let Drugmakers Pay Hospitals Back Instead of Discounting Up Front

The Health Resources and Services Administration on July 31 issued revised terms for a pilot program under the 340B Drug Pricing Program that would allow some drugmakers to provide rebates after a purchase rather than the upfront discounts that safety-net hospitals and clinics have historically received. The pilot is scheduled to take effect Jan. 1, 2027, and covers specific drugs and manufacturers involved in the first two rounds of the Medicare Drug Price Negotiation Program. HRSA Administrator Tom Engels said the revised pilot "helps modernize program oversight by improving visibility into 340B transactions while helping preserve the program's long-term sustainability."

340B requires manufacturers to sell discounted drugs to hospitals and clinics that serve large numbers of low-income patients. Replacing an upfront discount with a back-end rebate shifts the cash-flow burden onto the providers and gives manufacturers a larger role in verifying which purchases qualify. Hospitals and clinics argue they already operate on thin or negative margins and that the change would create substantial financial strain, while the administration frames it as a transparency and oversight measure.

The pilot has not taken effect and hospital groups have signaled continued opposition. An earlier version of the rebate pilot, floated in February 2026, drew similar objections.