Moving the 340B program from upfront discounts to a rebate model would add work for health systems but likely wouldn't change the picture for employers and other plan sponsors, according to Jeff Dunn, Pharm.D., MBA, president and CEO of NeosRx.

Dunn spoke with Managed Healthcare Executive (MHE) at the 2026 Pharmacy Benefit Management Institute (PBMI) Annual National Conference in Orlando, Florida, earlier this month after taking part in a panel session titled “340B and the Employer: Rebate Erosion, Transparency and What Comes Next.”

The Health Resources and Services Administration has proposed a pilot project that would shift the 340B program from upfront discounts to rebates for drugs subject to Medicare price negation under the Inflation Reduction Act. Hospitals and health systems fought the change with legal challenges and by other means, saying that it would add administrative burden and expose them to added costs until the rebates are paid.

Dunn told MHE thatchange would mean more administrative burden on the health system side, with 340B entities having to pull data, submit and invoice claims and reconcile them, and a lag of six to nine months before they see money they now receive up front.

For plan sponsors, however, he doesn’t expect much to change. “The priorities of the rebate are still going to be at the 340B entity before it gets to the plan sponsor, and so that claim is still going to be scrubbed out,” Dunn said. “So you’re still not going to get a rebate on it.”

The issue matters most in the heavily rebated, competitive drug classes, Dunn said. Historically, those have been drugs used to treat autoimmune conditions such as rheumatoid arthritis and psoriasis, along with those for diabetes and respiratory drugs. Dunn noted that autoimmune drugs have accounted for roughly half of rebates over the past decade, although biosimilars have shifted that somewhat. Many specialty, oncology and orphan drugs entail no rebates for PBMs and plan sponsorsl, making the 340B question largely moot for them.

If rebates were to disappear, Dunn agreed the conflict would go away too, but he said rebates have already been close to 100% passed through to clients for some time. He pointed to Federal Trade Commission settlements and the Consolidated Appropriations Act 2025 as pushing the industry away from drugs with high list prices and high rebates and toward those with low net cost, though he said it remains to be seen whether that actually changes behavior.

Dunn said that transparency by itself may have a limited effect. “Transparency does not equal aligned incentives,” he said. A PBM can tell a client what it is paying for a drug without telling it that it could save money by moving that drug elsewhere, he explained, or network rates may differ from one client to another. “You’re going to get data, but it still doesn’t mean that you are changing your behavior,” Dunn said.