Planning for Change: The Intersection of IRA Maximum Fair Price and the 340B Rebate Policies

“The best way to navigate change is to prepare for it, aligning policy, operations, and strategy before the new rules take effect.”

Setting the Stage

As we approach 2026, covered entities are preparing for one of the most complex policy intersections in recent memory. The Inflation Reduction Act’s (IRA) Maximum Fair Price (MFP) provisions are taking effect just as HRSA’s 340B rebate pilot launches, setting up a new era of complexity for hospitals, pharmacies, and manufacturers alike.

This blog walks through the key elements of both initiatives, how they overlap, and what steps covered entities should take to prepare now.

Background: What Is the Maximum Fair Price (MFP)?

The Inflation Reduction Act of 2022 introduced several provisions aimed at lowering healthcare costs, including a framework for the federal government to negotiate prices for certain high-cost drugs covered under Medicare.

Key Facts:

• Effective Dates: January 2026 (Part D), January 2027 (Expanded Part D), January 2028 (Part B), 2029+ (20 drugs per year)
• Eligibility: High-spend, single-source drugs with no generic/biosimilar competition

How the MFP Will Work in Practice

Pharmacies will continue with standard workflows, but the reimbursement mechanics will change.

Prescriptions billed to Medicare Part D will be adjudicated at the lower MFP rate, on average, about 60% below current reimbursement. Manufacturers will issue MFP rebates within 7–14 days to compensate pharmacies for the difference between the cost paid for the drug and the lower reimbursement. Manufacturers will not issue MFP rebates for prescriptions filled with 340B inventory, requiring careful duplication prevention.

Where MFP and 340B Collide

HHS published a pilot rebate policy on August 1, 2025, giving manufacturers the option to provide retrospective rebates instead of upfront 340B discounts for drugs affected by the IRA’s MFP provisions. Manufacturers were required to submit their policies by September 15, 2025, with HRSA approvals expected by October 15, 2025, and implementation to begin on January 1, 2026.

On October 30, 2025, HRSA published the details of the approved 340B rebate policies for January 1, 2026. The approved policies were largely as expected, with three primary exceptions:

• Rebate Requests Post-Purchase: HRSA stated that covered entities should only request rebates after a purchase is made. While this may seem intuitive, it introduces reporting challenges in virtual inventory settings, where timing between dispensing, accumulation, and purchase does not always align cleanly.
• Expanded Manufacturer Validation Requirements: Several manufacturer policies introduce validation elements that go beyond simple discount-duplication checks, which HRSA had originally outlined in its policy framework. Many include language requiring confirmation of factors such as:
  1. The NDC is part of the rebate pilot
  2. A date of dispense after January 1, 2026
  3. The drug being dispensed or administered from an eligible covered entity location and meeting the manufacturer’s contract pharmacy (CP) policy criteria
  4. The covered entity purchasing the product directly from the manufacturer or a wholesaler at WAC after January 1, 2026

These additional criteria suggest a more stringent manufacturer-led validation process that may increase administrative burden and create inconsistencies across participating manufacturers.

• Delayed Novartis Policy for Entresto: Novartis does not yet have an approved rebate policy for Entresto. Although this policy is still anticipated, it will not take effect as of January 1, 2026.

All drugs subject to MFP pricing are expected to transition from upfront 340B discounts to a rebate model, meaning covered entities will manage two overlapping rebate processes.

What Covered Entities Should Do Now

There are critical steps that 340B entities can and should take today:

1. Enroll and Prepare Financially: Retail and specialty ambulatory pharmacies must enroll with the Medicare Transaction Facilitator (MTF). Model financial impacts and develop a process to reconcile MFP rebates. This applies to all prescriptions within the scope of the MFP provisions, regardless of whether they are associated with participation in the 340B program.
2. Prevent Duplication: Create validation workflows to ensure prescriptions that qualify for both MFP and 340B rebates are managed properly and not subject to duplicate discounts. The opportunity for duplication is anticipated to be limited due to the overlapping rebate policies, but it will still require oversight.
3. Compare MFP and 340B Pricing: Conduct comparative pricing analyses to determine when inclusion or exclusion from 340B capture makes financial sense.
4. Engage Third-Party Administrators (TPAs): Confirm that your TPA is prepared to maintain current workflows for drugs impacted by the rebate pilot. Communicate your preferred approach for managing transactions that are affected by both MFP and 340B rebates.
5. Safeguard 340B Pricing Integrity: Ensure accurate pricing for Medicaid billing and patient assistance programs. The 340B ceiling price for impacted drugs may only be available through the Office of Pharmacy Affairs Information System (OPAIS) beginning January 1, 2026.
6. Plan for Data and Dispute Management: Work proactively to address data submissions, rebate eligibility, reconciliation, and dispute resolution processes.
7. Review Beacon Terms and Conditions: Before registering for rebate submissions, carefully review the Beacon Channel Management platform’s terms and conditions. Understand what your organization is committing to — including data-sharing obligations, liability provisions, and how manufacturer access to covered entity data will be managed. This step is critical for compliance, privacy, and governance planning.

Managing the 340B Rebate Model

With the move to rebates, covered entities will need to adapt their operational playbooks, including data submission, rebate monitoring, acquisition cost management, billing implications, and reconciliation systems.

The Bigger Picture: Compliance, Cost, and Care

The convergence of the MFP and 340B rebate models represents more than a policy shift, it’s a fundamental transformation in how safety-net providers manage access, affordability, and compliance.

Both programs shift significant responsibility back to covered entities, from pricing management to rebate reconciliation. The most successful organizations will be those that maintain standard workflows wherever possible, implement robust tracking and data systems, communicate proactively with partners, and respond promptly to denials and discrepancies.

As these changes take effect, the covered entities that plan ahead, building transparent, compliant systems now, will be best positioned to protect the 340B benefit and the patients it serves.

References

1. Health Resources and Services Administration (HRSA). 340B Drug Pricing Program: Rebate Model Policy Approvals. Federal Register, October 30, 2025.
2. Health Resources and Services Administration (HRSA). 340B Drug Pricing Program Rebate Pilot Framework. Federal Register Notice, August 1, 2025.
3. Centers for Medicare & Medicaid Services (CMS). Medicare Drug Price Negotiation Program and Maximum Fair Price (MFP) Implementation Guidance. CMS.gov, 2025.
4. Beacon Channel Management. Terms and Conditions and Entity Registration Requirements for 340B Rebate Submissions. BeaconChannelManagement.com, 2025.
5. U.S. Department of Health & Human Services (HHS), Office of Pharmacy Affairs (OPAIS). 340B Ceiling Price and Covered Entity Access Requirements. HRSA.gov/opa, 2025.
6. Office of the Assistant Secretary for Planning and Evaluation (ASPE). Drug Pricing Trends and Inflation Reduction Act Impacts. HHS.gov/aspe, 2024.