Article
What the court did
On Dec. 29, Judge Lance Walker of the U.S. District Court for the District of Maine granted a preliminary injunction against the Health Resources and Services Administration’s 340B rebate model pilot. The American Hospital Association, the Maine Hospital Association and four safety-net hospitals brought the case on Dec. 1.
The court found the agency likely violated the Administrative Procedure Act. It described the administrative record as thin and said HRSA had not weighed how much providers rely on upfront discounts or what it would cost them to pay full price and wait for rebates. The injunction applies nationally, not only to the plaintiffs. The federal government appealed to the First Circuit and asked for an emergency stay, and several drugmakers are appealing the denial of their bids to join the case.
What the pilot would have changed
Nine manufacturers had been approved to use rebates instead of upfront discounts on ten drugs. Covered entities would have bought those drugs at full price, submitted claims data and waited for rebates, which manufacturers were to pay within 10 days of a request. The stated aim was to prevent duplicate discounts between 340B and the Medicare prices negotiated under the Inflation Reduction Act, which means the drug list would likely grow over time.
The cash effect on hospitals would be large. A 340B Health survey estimated the average disproportionate share hospital would have to float about $8.6 million a year. The plaintiffs put industry compliance costs at about $400 million.
Why this is a pause, not an ending
The ruling did not say a rebate model is unlawful. It said HRSA did not do the work required to justify this one. A revised version with a fuller record could return, and the appeal is still pending.
Finance and pharmacy leaders should use the time well:
- Keep the cash model current. Estimate working capital needs if rebates resume on the original ten drugs and on a longer list.
- Check data readiness. Confirm that claims-level data could be produced and submitted quickly, and review contracts with any vendor that would handle it.
- Brief the board. Treat 340B savings as a revenue line with policy risk, alongside the outpatient payment changes that also took effect Jan. 1.
Archive entry for Jan 4, 2026, added Nov. 11, 2026.
Sources
- Judge blocks 340B rebate pilot program (Becker’s Hospital Review, Dec 29, 2025)
- 340B rebate model no longer beginning Jan. 1 after court issues preliminary injunction (HFMA, Dec 29, 2025)
- Court issues nationwide preliminary injunction on 340B rebate model pilot program (National Law Review, Dec 31, 2025)