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Forum Insider | IRA Reshapes 340B Landscape

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Related Topics:
Finance and Operations
Relevant Roles:
Chief Pharmacy Officers

At THMA’s Pharmacy Growth Collaborative Forum, leaders tackled the financial and policy challenges reshaping the pharmacy landscape. One session zeroed in on the impact of the Inflation Reduction Act, yielding insights on the financial, operational and strategic implications for leaders.  

What’s Changing 

Starting in 2026, the Inflation Reduction Act (IRA) will change how Medicare pays for drugs, and this has big implications for hospitals and clinics in the 340B program. Under the IRA, ten drugs will be subject to Medicare price negotiation, with more added each year.  Maximum Fair Price (MFP) will be introduced as a new reimbursement benchmark, which is expected to erode margins on high-cost drugs and force pharmacies to operate closer to neutral.  

To address this, manufacturers are launching a rebate system: 

  • Hospitals will now purchase at WAC (Wholesale Acquisition Cost, the drug’s sticker price) and then submit claims for rebates. 

  • Rebates are processed by Beacon, a vendor serving as the middleman between manufacturers and providers. 

  • Payments must be made quickly (within 10 days), but reconciliation will be complex and may create transparency challenges 

The effect on hospitals and health systems will vary widely based on drug mix, share of Medicare Part D patients, and designation status (such as DSH or expansion entities). Modeling the net impact is difficult due to limited transparency and evolving rules.  Key Takeaways: Entities must act quickly to prepare, including enrolling with Beacon, aligning with TPAs, and building internal processes for reconciliation. As organizations mobilize, they should also prepare for impacts in four key areas:    

  • Financial impact: 340B savings on IRA drugs may shrink by 50–60%. 

  • Operational complexity: Hospitals, TPAs (third-party administrators), and distributors will need new workflows to track and reconcile rebates. 

  • Uncertainty for contract pharmacies: Many expect reduced access to IRA drugs in those settings. 

  • Future expansion: Part B drugs join in 2028, with added complexity for orphan and specialty drugs.