ADAP Advocacy Urges HRSA to Abandon Flawed 340B Rebate Pilot, Citing Existing Success of AIDS Drug Programs

ADAP Advocacy has submitted written comments urging the Health Resources and Services Administration to modify its proposed 340B rebate pilot project, calling it deeply flawed and potentially contrary to the Administrative Procedure Act. The advocacy organization fully endorsed the agency removing itself as an obstacle to fully implementing a rebate model for all covered entities under the 340B Drug Pricing Program, particularly hospitals. The written comments responded to the recent notice in the Federal Register, HHS Docket No. HRSA–2025–14619, which solicited feedback on the proposed voluntary 340B Rebate Model Pilot Program.

Brandon M. Macsata, CEO of ADAP Advocacy, stated that State AIDS Drug Assistance Programs have essentially served as the pilot project for this rebate model, with their ability to account for how 340B rebates are used widely considered the gold standard among covered entities. The organization favors a robust 340B program because ADAPs rely on it to serve as the payor of last resort for thousands of people living with HIV/AIDS. Macsata emphasized that HRSA is dragging its feet with this pilot program, and it is time the program returned to its legislative intent by serving patients.

Macsata further noted that although ADAPs and many smaller covered entities utilize the 340B program to assist the uninsured and underinsured, reflecting the original intent of the program, many 340B hospitals receive 87% of the benefits while providing abysmally low levels of charity care. In 2002, the last year for which data is available, 340B hospitals devoted just 2.15% of their spending to charity care. ADAP Advocacy's 340B map shows the disturbing pattern of 340B hospitals growing their programs larger while their charity care commitments erode and executive compensation increases dramatically.

For 27 years, ADAPs have operated using a rebate mechanism, providing a gold standard for broader implementation of that well-established system. State Drug Assistance Programs demonstrate how rebates operate in the best interest of all 340B stakeholders. Using a rebate model, ADAPs have dramatically grown their drug and non-drug services for HIV/AIDS patients while providing financial assistance to patients and funding for non-drug HIV/AIDS support services. Significantly, 340B ADAP drug rebates offered just 5% of ADAP funding for HIV/AIDS patients in 1997, the year before the rebate system started. By 2022, those rebates successfully funded 47% of programs, an increase of more than 800%, including direct financial assistance to drug patients in need. 340B rebates, estimated to fund 55% of these programs in 2025, have proven effective.