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Another Drug Manufacturer Pursues Rebate Program as 340B Alternative

Client Alert
December 11, 2024

Some of the nation’s largest drug manufacturers are forging ahead to implement rebate programs for 340B drugs, even after the federal government has called these programs illegal.

In August 2024, Johnson & Johnson first announced its plan to implement a drug rebate program for 340B drugs whereby the manufacturer would charge buyers full price for drugs and offer a back-end rebate, instead of allowing safety net providers to purchase outpatient drugs at lower costs, as they have done since the program’s inception.

In response, the Health Resources and Services Administration (HRSA), the federal agency that oversees the 340B drug pricing program, deemed Johnson & Johnson’s rebate program illegal, prompting Johnson & Johnson to initially revoke the rebate plan. However, Johnson & Johnson had a change of heart and on November 12, 2024, filed a lawsuit to challenge HRSA’s decision.

Emboldened, other drug manufacturers have begun to implement drug rebate programs. On November 26, 2024, Bristol Myers Squibb filed a lawsuit against HRSA, asking the federal court to deem its rebate program legal and prevent U.S. Department of Health and Human Services from taking agency action to invalidated rebates.

While it is unclear how these federal courts will rule, these lawsuits signal a desire by drug makers to change how they offer 340B drug discounts to health care providers that operate using scarce federal resources, a move that could threaten the sustainability of safety net providers and the patients they serve.

If you have questions about these lawsuits, or the 340B program in general, please contact Member Daphne Kackloudis at dlkackloudis@bmdllc.com or Attorney Jordan Burdick at jaburdick@bmdllc.com.

Health LawHealthcareHRSA
Client Alert

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OAAPN | Year In Review: 2026 Ohio Board of Nursing and Ohio Law Rules

February 9, 2026Find out key changes to Ohio law and the Ohio Board of Nursing rules that have directly impacted APRN practice over the past year, including Psychiatric Inpatient Documents, Intimate Examinations, Signature Authority, Duties Related to Fetal Death, Retail IV Therapy Clinics, Release from Permanent Restrictions, Disciplinary Action, Course on Drugs and Prescriptive Authority, Overdose Reversal Drugs, Office Based Opioid Treatment, Withdrawal Management for Substance Use Disorder, Safe Haven Program, and more.Client Alert

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January 28, 2026House Bill 537, introduced in the Ohio House of Representatives, proposes a comprehensive regulatory framework for certified nurse-midwives, certified midwives, licensed midwives, and traditional midwives. The legislation would clarify scope of practice, establish licensure standards, and impose new requirements for freestanding birthing centers and home births. Healthcare providers and facilities should be aware of the proposed changes and their potential operational impact.Client Alert

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January 26, 2026The Health Information Privacy Reform Act (HIPRA) seeks to extend privacy protections to health data not covered under HIPAA, including data collected by apps and wearables. HIPRA introduces broader definitions of protected health information, strengthens privacy and security requirements, establishes patient notification rights, and sets national de-identification standards. Companies processing health data should monitor developments to ensure compliance.
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