Yesterday, the U.S. Court of Appeals for the First Circuit declined to stay a lower court’s injunction blocking the 340B Rebate Model Pilot Program, meaning the pilot remains on hold while the legal appeals proceed. The court’s decision leaves in place the December 29 order in which the federal district judge prevented HHS from launching the pilot on January 1, finding that the agency likely failed to adequately consider the longstanding reliance interests and operational realities of 340B covered entities. The government had asked the appeals court for an emergency pause of that injunction, but the court declined, signaling skepticism about the government’s likelihood of success on appeal.

In practical terms, this means entities participating in 340B can continue receiving discounted drug prices up front, instead of purchasing at WAC and waiting for rebates to receive the statutory discount. The courts have been concerned that the rebate pilot would shift financial risk and administrative burden onto safety-net providers, straining cash flow and resources needed to serve patients, without sufficient justification or planning by the government. By keeping the pilot on hold, the appeals court preserved the status quo while it considers the case on the merits, a development widely viewed as significant for covered entities that have depended on upfront 340B savings throughout the program’s decades of operations.

Find Out More:

U.S. Court of Appeals for the First Circuit Jan 7th decision

“Federal Appeals Court Rejects HHS’ Bid to Revive 340B Rebate Pilot,” 340B Report, January 8,
2026.

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Why This Matters:

The court’s decision keeps 340B upfront drug discounts in place for now, protecting entities from cash-flow strain and administrative burdens while the legal challenge to the 340B pilot continues.