D.C. Circuit: drug makers can't force a 340B rebate model without HHS approval — the Secretary, not manufacturers, controls the program

On July 21, 2026 the U.S. Court of Appeals for the D.C. Circuit upheld a lower court and ruled that Section 340B does not permit manufacturers (Novartis and Johnson & Johnson) to unilaterally replace up-front 340B discounts with a post-purchase rebate model unless the HHS Secretary approves it — holding, in effect, that the statute puts the Secretary and not the manufacturers in control of the program.

The decision preserves the up-front-discount structure that community health centers and their contract pharmacies depend on, while leaving open whether HHS could authorize a rebate model in the future. It is a defensive win, not a permanent fix: other manufacturer proposals and HHS's own rebate-pilot review remain live.