Advocating for Change: The Push for a 340B Rebate Model

The Case for a Revised 340B Rebate Model

In a recent, pointed communication to the Health Resources and Services Administration (HRSA), ADAP Advocacy has positioned itself firmly in favor of revising the proposed 340B rebate pilot project. The organization, with a history deeply rooted in aiding those living with HIV/AIDS, has raised concerns over the pilot project's alignment with the Administrative Procedure Act and its potential to obstruct rather than facilitate the full implementation of a rebate model for all covered entities, particularly hospitals. This advocacy reflects a broader call for reforms that align more closely with the original legislative intent of the 340B Drug Pricing Program—an intent centered on serving the most vulnerable populations.

Piloting the Unnecessary: The ADAP Rebate Experience

ADAP Advocacy's critique is grounded in the substantial evidence provided by the State AIDS Drug Assistance Programs (ADAPs), which, for nearly three decades, have utilized a rebate mechanism to fund a significant portion of their services. This mechanism, according to Brandon M. Macsata, CEO of ADAP Advocacy, has already served as a de facto pilot, demonstrating the feasibility of retrospective rebates without introducing undue delay or administrative burdens. Thus, the organization questions the necessity of conducting a new pilot, suggesting instead that the focus should be on scaling this proven model across the 340B program.

Addressing Disparities and Ensuring Accountability

The critique extends beyond the pilot project's structure to address broader concerns about how the 340B benefits are distributed and utilized. ADAP Advocacy points to a troubling trend among 340B hospitals, which, despite receiving the lion's share of program benefits, have been shown to commit a disproportionately low percentage of their spending to charity care. This observation not only raises questions about the equitable distribution of 340B program benefits but also about the accountability mechanisms in place to ensure that the program serves its intended purpose. By pushing for a rebate model, ADAP Advocacy aims to redirect the program's focus toward patient care, leveraging the efficiencies and accountability that a rebate system can offer.

From Funding to Care: The Impact of Rebates

ADAP Advocacy's endorsement of the rebate model is not merely theoretical. The organization presents compelling data to illustrate the potential of rebates to transform patient care. Since the inception of the rebate system within ADAPs, there has been a dramatic increase in the percentage of program funding derived from rebates, rising from a mere 5% in 1997 to an estimated 55% in 2025. This substantial growth in rebate funding has enabled ADAPs to expand their services significantly, offering both drug and non-drug support to those living with HIV/AIDS. The success of this model within ADAPs serves as a powerful example of how a well-implemented rebate system can enhance the delivery of care to those in need.

A Call to Action

ADAP Advocacy's push for the adoption of a rebate model within the 340B program is more than a critique of the current proposal; it is a call to action. It is a reminder of the program's original mission to serve as a lifeline for the uninsured and underinsured. By advocating for a shift to a rebate model, ADAP Advocacy is not only championing a more efficient and accountable system but also reaffirming the fundamental principle that healthcare programs should prioritize patient care above all else. In doing so, the organization invites stakeholders to reconsider the structure and goals of the 340B program, with the hope of realigning it more closely with its legislative intent and the needs of those it was designed to serve.

For more insights into ADAP Advocacy's position and detailed recommendations, interested parties are encouraged to review the full letter submitted to HRSA, available here.