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LUGPA Policy Brief: HRSA Advances 340B Rebate Model Pilot Through New Information Collection Request

June 2026

At a Glance

HRSA has issued a new Information Collection Request (ICR) related to a revised 340B Rebate Model Pilot Program. The proposal would require participating covered entities to purchase certain drugs at full price and then submit claims-level data to manufacturers to receive rebates that effectively provide the 340B discount.

The pilot would initially apply to manufacturers participating in the Medicare Drug Price Negotiation Program for IPAY 2026 and 2027 drugs. While the notice addresses reporting requirements rather than implementation, it signals HRSA's continued interest in a rebate-based 340B model following the withdrawal of its earlier pilot program.

Why It Matters

The proposal represents a significant shift in how 340B discounts would be delivered. Supporters argue that a rebate model could improve transparency and help prevent duplicate discounts and diversion. In contrast, many hospitals, health systems, and safety-net providers contend that the model would create substantial administrative burdens, compliance costs, and cash-flow challenges by requiring providers to pay full acquisition costs upfront and manage complex rebate reconciliation processes.

The proposal also comes amid growing scrutiny of the 340B program's expansion and its impact on healthcare competition, site-of-care dynamics, and provider consolidation.

Potential Impact on LUGPA Members

Most independent urology practices are not 340B-covered entities, but members may be indirectly affected through relationships with hospitals, health systems, infusion centers, and specialty pharmacy partners. Potential implications include:

  • Increased administrative and compliance costs for participating hospitals.
  • Continued focus on duplicate discounts, diversion, and broader 340B oversight.
  • Potential changes in specialty drug purchasing and distribution arrangements.
  • Renewed policy discussions regarding the competitive advantages 340B may provide hospital-owned providers relative to independent physician practices.

For independent urology practices, the broader concern remains whether future 340B reforms will address incentives that contribute to physician practice acquisitions and shifts in site of care away from community-based care.

LUGPA Position

LUGPA supports the 340B program's mission of helping vulnerable and underserved patients access needed care. However, the association continues to advocate for reforms that improve transparency, strengthen accountability, ensure that savings are directed to patients, prevent duplicate discounts and diversion, and reduce incentives that encourage hospitals to acquire independent physician practices. LUGPA also supports policies that promote site-neutral and competition-neutral reimbursement.

What's Next

HRSA is expected to issue additional guidance outlining operational requirements and participation standards if it proceeds with a revised rebate pilot. LUGPA will continue to monitor developments and advocate for reforms that preserve patient access while addressing competitive inequities that disadvantage independent physician practices.