As manufacturer-imposed restrictions on 340B contract pharmacy arrangements have increased, alternative models for accessing 340B pricing — including rebate-based approaches — have gained more attention. Several manufacturers have introduced models where covered entities purchase drugs at wholesale acquisition cost (WAC) and then receive rebates for eligible 340B claims, often contingent on ESP data submission.

In response to these evolving models, HRSA has provided limited but noteworthy clarification on how such rebate programs intersect with 340B compliance and oversight.

This post outlines where things stand, what HRSA has (and hasn’t) said, and what covered entities should keep in mind when evaluating rebate participation.

Background: The Rise of the Rebate Model

Since 2020, a growing number of manufacturers have placed limitations on 340B pricing at contract pharmacies. These restrictions often require claims-level data through 340B ESP and, in some cases, eliminate access to upfront 340B discounts altogether.

In response, several manufacturers — including Merck, Johnson & Johnson, and GSK — introduced rebate models. Under these programs:

• Covered entities purchase drugs at WAC.
• They submit encounter-level data (often via ESP).
• If the claims meet eligibility criteria, a rebate is issued to match the 340B discount value.

While rebate models may offer partial access to savings, they shift administrative and financial burdens onto covered entities, who must pay upfront and reconcile rebates later.

HRSA’s Position: What We Know

As of 2025, HRSA has not issued formal guidance explicitly approving or disapproving rebate-based 340B pricing models. However, in public statements and audit findings, several key themes have emerged:

• The 340B statute requires manufacturers to offer discounts at the point of sale, not via post-sale rebate. Rebate arrangements may be viewed as inconsistent with the statute’s original intent — particularly if they delay or dilute the discount.
• HRSA has indicated that rebate models do not eliminate a manufacturer’s obligation to offer 340B pricing under Section 340B(a)(1), especially when contract pharmacy arrangements are part of the covered entity’s care delivery.
• In recent enforcement letters and OPA statements, HRSA has reaffirmed that any restriction on 340B pricing access, regardless of the mechanism, must comply with federal law and cannot unilaterally change pricing obligations.

That said, HRSA has also acknowledged the complexity of modern data exchange and has not taken public enforcement action against manufacturers solely for offering rebates.

Operational Implications for Covered Entities

For covered entities considering rebate participation, several factors should be carefully evaluated:

• Cash Flow Impact: Rebate models typically delay savings, requiring upfront WAC purchases and manual reconciliation.
• Administrative Burden: Data submission, claim matching, and rebate tracking add significant workflow complexity.
• Audit Risk: Entities must ensure all claims included in rebate submissions still meet HRSA’s 340B patient definition, despite the alternative discount path.
• Transparency: Rebate values may vary by NDC or encounter type, and covered entities may have limited visibility into rebate calculation methodology.

Industry Outlook

As legal challenges between manufacturers and states continue, and as stakeholders await further federal clarification, rebate models remain in a regulatory gray area. Some covered entities view them as a way to recapture partial value in restricted environments; others have opted out due to complexity and uncertainty.

HRSA’s ongoing silence suggests that formal guidance may be forthcoming — especially as Congressional interest in 340B reform grows. In the meantime, covered entities should document rebate participation carefully, maintain eligibility logic for submitted claims, and monitor manufacturer terms for updates.

Final Thought

While rebate models offer a potential workaround to manufacturer restrictions, they introduce new compliance and operational challenges that covered entities must manage carefully. HRSA’s position, though limited, reinforces the importance of statutory integrity and documentation — regardless of how pricing is delivered.

At RxTrail, we help covered entities assess the tradeoffs of participating in rebate models, track financial impact, and maintain audit readiness. If you’re evaluating a rebate approach or need support with ESP workflows, we’re here to help. Schedule a call with our team today.

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