Trump Administration Rejects Pharma 340B Rebate Scheme

Under the Trump administration the Department of Health and Human Services this week unequivocally opposed pharmaceutical industry attempts to dismantle the 340B drug Discount Program and replace it with a rebate system.

In a motion for summary judgement filed to the United States District Court for the District of Columbia, the agency asked the judge to throw out the drug industry’s argument claiming HHS does not have the legal clout to block rebates. The “Agency’s decision to prevent Plaintiffs from implementing a rebate model to effectuate 340B price reductions was within its statutory authority,” said the brief. Equally important, HHS argues “proposed cash rebate models would have upended the way the 340B Program has operated for more than thirty years.”

The 340B program has been a cornerstone of the healthcare safety net for more than three decades, requiring drug manufacturers to provide up front medication discounts to eligible hospitals and clinics serving high numbers of low-income and uninsured patients. These price breaks enable health providers to stretch their limited resources further, allowing them to provide comprehensive care that extends beyond just pharmaceuticals.

Crucially, HHS reiterated its longstanding position that the 340B statute prohibits drugmakers from unilaterally implementing rebate models without agency approval. This stance is consistent with the first Trump administration and sends a clear message that the pharmaceutical industry cannot rewrite the rules to suit its own interests.

We commend the new Trump administration for its steadfast defense of the 340B program. We must remain vigilant, however, as Big Pharma’s efforts to destroy the 340B program continue unabated.