Federal District Court Enjoins HRSA’s 340B Rebate Model Pilot Program

On December 29, 2025, Judge Lance Walker of the U.S. District Court of Maine issued a preliminary injunction halting the Health Resources and Services Administration’s (“HRSA”) implementation of the 340B Rebate Model Pilot Program (the “Pilot”).¹ The court held that the Pilot is likely arbitrary and capricious under the Administrative Procedure Act because HRSA did not adequately consider the Pilot’s potential impact on 340B hospitals. In its opinion, the court stated that Congress “clearly gave [HRSA the] option” to approve 340B rebate models, but that, in this instance, HRSA failed to consider hospitals’ decades-long reliance interests in receiving upfront 340B discounts and failed to reasonably explain the justification for its shift in policy when allowing for rebate models. HRSA immediately appealed the decision to the First Circuit Court of Appeals.

The court’s decision comes mere days before the first nine HRSA-approved rebate model plans were to become effective.² Under the approved plans, manufacturers were to implement 340B-discounted prices for pertinent drugs tied to the Inflation Reduction Act negotiation program through retrospective rebates rather than upfront discounts that traditionally have been extended on 340B drug purchases. Drugs were to be subject to the Pilot for at least one year, starting January 1, 2026. The Office of Pharmacy Affairs (“OPA”) had stated that it would consider extending the program to additional drugs. Under the Pilot, OPA would evaluate the effectiveness of the rebate model plans through data reporting from participating manufacturers and feedback from covered entities.³

Contact the authors or your usual Ropes & Gray advisor with any questions.