A Win for Kids — And Why 340B Still Needs Defending

Protecting the 340B Drug Pricing Program remains a top priority for the Children’s Hospital Association, and recent developments underscore the importance of our advocacy.

Working closely with our member hospitals, we have taken action to safeguard 340B and the children’s hospitals that rely on it. Our efforts helped halt a pilot rebate program that would fundamentally alter how 340B operates and place an unsustainable financial burden on children’s hospitals. 

In January, a federal appeals court paused the proposed rebate program that would provide money back to hospitals after drugs were purchased. The administration dropped an appeal of the courts’ decision, allowing upfront discounts to continue.

With the pilot rebate program now on an indefinite pause, CHA is building on that momentum to continue protecting this vital program. 

Why 340B matters to children’s hospitals

The 340B Drug Pricing Program allows hospitals that treat large numbers of low-income patients to purchase outpatient drugs at lower prices. Designed as a bipartisan safety-net program, 340B helps children’s hospitals stretch limited resources and sustain crucial services. 

A recent win and what it means

On Jan. 7, a federal court upheld a pause on the proposed rebate model, recognizing the significant disruption the change would cause. The administration attempted to advance the program through an appeal, but the effort was withdrawn after the court’s rejection. This outcome followed extensive advocacy from CHA, children’s hospitals, and partner organizations, including a key amicus brief that elevated the consequences for pediatric care.

This decision represents a meaningful victory for children’s health and validates the concerns raised by CHA and our members. While it does not end the conversation around 340B, it reinforces the importance of ensuring any policy discussions reflect how the program functions for children’s hospitals and what is at stake for patients.

Illustrating impact

As efforts to change the 340B program continue, CHA remains vigilant in our efforts to clearly demonstrate how this crucial federal program supports children, families, and communities.

Children’s hospitals use 340B savings to support services that benefit patients and communities, including:

• Mental and behavioral health care
• Cancer treatments
• Cell and gene therapies
• Specialty pharmacy services 
• Workforce support
• Access to affordable medications

CHA’s upcoming 340B Impact Profile will highlight how hospitals put the program to work for kids and will serve as a critical resource in our conversations with policymakers.

Built-in accountability

Children’s hospitals that participate in 340B are already held to rigorous standards. To remain eligible, hospitals must complete annual recertification, maintain auditable records, demonstrate compliance with all program requirements, and continue serving a high percentage of low-income patients. They also submit annual cost reports to Medicaid agencies and publicly report financial assistance and community benefits to the Internal Revenue Service.

These safeguards ensure transparency and accountability, while allowing hospitals to focus on their primary mission: providing high-quality care to children who need it most.

Focusing on what comes next

Interest in 340B continues at both the federal and state levels. As those discussions move forward, CHA will remain a strong, consistent voice for children’s hospitals, ensuring policymakers understand the unique role these hospitals play and the potential consequence of changes to the 340B program.

Protecting 340B is not just about preserving a program. It’s about protecting access to care, supporting pediatric expertise, and keeping children’s health front and center in policy decisions.

To keep members informed, CHA is hosting a webinar that will cover the latest legal and congressional updates, outline our 2026 340B priorities, unveil our new 340B Impact Profile resource, and discuss how children’s hospitals can continue to help shape the future of policy.