Federal Courts Block 340B Rebate Model

Following advocacy from America's Essential Hospitals, two separate federal courts have temporarily prohibited the Health Resources & Services Administration (HRSA) from launching a pilot rebate model for the 340B Drug Pricing Program. As of noon on Dec. 31, 2025, the agency is pausing implementation of the rebate model pilot program for all covered entities, according to a notice on the HRSA website. Manufacturers must continue to offer all 340B drugs to covered entities with an up-front discount.

On Dec. 29, a judge with the U.S. District Court for the District of Maine issued a preliminary injunction, blocking the rebate model pilot from launching on Jan. 1. The judge found that the pilot likely violates the Administrative Procedure Act because the agency did not appropriately account for impacts on 340B covered entities. The judge also took issue with the agency's statement that it will continue to consider input from stakeholders while moving forward with implementation. In a statement, America's Essential Hospitals applauded the court's decision.

The Department of Health and Human Services (HHS) launched an emergency appeal of the decision to the U.S. First Circuit Court of Appeals. That court denied the request for an emergency stay, leaving in place the lower court's injunction. The appeals court is continuing to review the facts of the case and has stated "it intends to rule on the broader stay request as soon as practicable."

The rebate model pilot remains on hold as the First Circuit reviews HHS' appeal and stay request, with the district court's injunction continuing to block implementation in the interim.

Contact Director of Policy Rob Nelb, MPH, at [email protected] or 202.585.0127 with questions.