ADAP Advocacy has submitted formal written comments to the Health Resources and Services Administration (HRSA) urging the agency to modify its proposed 340B rebate pilot project, describing it as deeply flawed and potentially contrary to the Administrative Procedure Act. The advocacy organization called for HRSA to remove itself as an obstacle to fully implementing a rebate model for all covered entities under the 340B Drug Pricing Program, particularly hospitals.
The comments, submitted in response to HHS Docket No. HRSA–2025–14619 published in the Federal Register, argue that no pilot program is necessary because State AIDS Drug Assistance Programs (ADAPs) have effectively served as the pilot project for this rebate model for 27 years. According to ADAP Advocacy CEO Brandon M. Macsata, ADAPs' ability to account for how 340B rebates are used is widely considered the gold standard among covered entities.
The significance of this advocacy effort lies in the demonstrated success of the rebate model within ADAPs. Since implementing the rebate system in 1998, 340B ADAP drug rebates have grown from funding just 5% of programs for HIV/AIDS patients in 1997 to funding 47% by 2022—an increase of more than 800%. These rebates are estimated to fund 55% of these critical programs in 2025, providing direct financial assistance to drug patients in need and supporting non-drug HIV/AIDS services.
ADAP Advocacy 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. The organization argues that HRSA is unnecessarily delaying full implementation through the pilot program, and it is time for the program to return to its legislative intent of serving patients.
The advocacy group's 340B map reveals a disturbing pattern where 340B hospitals, which receive 87% of the program's benefits, have grown their 340B programs while charity care commitments erode and CEO compensation increases dramatically. Data from 2002, the last year available, shows 340B hospitals devoted just 2.15% of their spending to charity care.
Macsata emphasized 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 have profited while providing minimal charity care. The organization contends that much larger, better-resourced 340B hospitals are in an even better position to operate effectively under a rebate model than the pharmacies participating in ADAPs, which operate on significantly smaller annual federal funding awards.
