Jeff Dunn, Pharm.D., MBA, on the 340B program and lost rebates | PBMI 2026

When a health plan or pharmacy benefit manager (PBM) pays a claim for a drug dispensed through the 340B program, the manufacturer does not pay a rebate on that claim, leaving the plan sponsor to absorb the cost. Jeff Dunn, Pharm.D., MBA, president and CEO of NeosRx, spoke with Managed Healthcare Executive about that issue after participating in a panel session at the 2026 Pharmacy Benefit Management Institute (PBMI) Annual National Conference in Orlando, Florida, earlier this month.

Congress created the 340B program in the early 1990s to fix an unintended consequence of the Medicaid rebate program, Dunn explained. The covered entities were meant to receive drug discounts so they could better serve underserved populations, but manufacturers were hesitant to offer those discounts because doing so could reset the Medicaid best price. The 340B program was the solution.

The problem for plan sponsors shows up downstream. When a plan or PBM submits a claim to the manufacturer, the manufacturer doesn’t pay the rebate because a 340B discount has already been applied by the hospitals, clinics and other “covered entities.” But the plan is still paying for the claim. “Their costs now have gone up because they're not getting the rebate on those claims," he said.

Dunn said he doesn't know whether the problem is growing, but it has become more top of mind. He attributes that to a combination of factors: greater transparency and a better understanding of how money flows through the system, overall cost-pressure trends, and rebate changes such as those that have come with biosimilars. Employers, integrated delivery networks and other entities are “really struggling with affordability," he said, "and so they're paying a little bit more attention to their costs.”

Dunn was one of four panelists in the session “340B and the Employer: Rebate Erosion, Transparency, and What Comes Next.” The others were Mary Bellanti, RPh, vice president of clinical strategy at MedImpact; Deborah Dempsey, Pharm.D., MBA, RPh, chief operating officer of ProAct; and Karen van Caulil, Ph.D., president and CEO of the Florida Alliance for Healthcare Value.