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The rebate pilot is off the table, for now
HHS announced the 340B rebate model pilot in August 2025. It would have required participating hospitals to buy certain drugs at full price and seek rebates afterward, rather than receiving the discount upfront. The American Hospital Association, the Maine Hospital Association and four safety-net systems sued, arguing the model could add hundreds of millions of dollars in annual costs.
A federal district court in Maine issued a preliminary injunction on Dec. 29, and the 1st Circuit declined to stay it on Jan. 7. In a Feb. 5 court filing, HHS said further litigation would not be fruitful and asked the court to vacate the program and send the matter back to HRSA. If the department tries again, it must issue new public notice, take comments and set an effective date at least 90 days after announcing approved manufacturers.
That is a meaningful win for 340B hospitals. It is not a permanent one. The remand leaves room for a revised rebate design, and finance teams should keep the rebate scenario in their long-range models.
Lilly’s claims-data requirement is live
On a separate track, Eli Lilly told covered entities in mid-January that starting Feb. 1 they must submit claims-level data for in-house pharmacy dispensing of its products, extending a policy that has applied to contract pharmacies since December 2021. The requirement covers Lilly’s full portfolio. Data must go to the 340B ESP platform within 45 days of dispensing, or 60 days after administration for certain infused drugs such as Alimta, Cyramza, Erbitux and Kisunla. Entities that fail to submit timely, complete data may lose access to 340B pricing until the issue is fixed. Covered entities in 10 states, including Colorado, Maine and Tennessee, are exempt, as are federally qualified health centers.
The AHA asked HRSA on Jan. 26 to stop the policy, calling it costly and unlawful, raising concerns about the reliability of the ESP platform, and urging HRSA to consider civil monetary penalties against the manufacturer.
What hospital leaders should do
- Quantify Lilly exposure. Know the annual 340B savings tied to Lilly products, especially in-house infused oncology drugs.
- Decide on compliance. Pharmacy, compliance and legal leaders should agree on whether to submit data under protest, and document the decision.
- Test the operational burden. Medical claims for administered drugs are harder to extract than pharmacy claims. Confirm IT and revenue cycle capacity before deadlines pass.
- Keep the rebate scenario alive. A revised pilot could return with 90 days’ notice.
- Brief the board. For many safety-net hospitals, 340B savings support services that would otherwise run at a loss.
Archive entry for Feb 7, 2026, added Nov. 11, 2026.