This third and final article in this series considers the implications of the 340B/Medicare Maximum Fair Price (MFP) duplicate discount estimates developed in the first two installments. Part 1 explained why duplicate discounts matter in the debate over the revised 340B rebate model pilot (the Pilot), while Part 2 described the underlying data, methodology, and findings. The analysis that follows considers the effect of the 2026 list price reductions, factors that may increase or reduce reported estimates, comparisons with prior research, and the broader relevance of the Pilot data to Medicaid duplicate discounts, diversion, and Medicare inflation-rebate duplicate discounts. The study concludes that MFP/340B duplicates discounts vastly outweigh the Pilot’s costs.

Duplicate discount findings for all Medicare Part D drugs

Across every segment tested, our estimates of MFP/340B duplicate discounts were higher when prices before list price reductions were applied than when reduced list prices were applied. This demonstrates that although list price reductions lowered MFP/340B duplicate discounts to some extent, duplicate discounts remained quite large even after those reductions. These list price decreases were predicted before they occurred,^1,2 and their impact has now been assessed. Importantly, lower list prices also reduce the initial prices at which covered entities acquire MFP drugs.

As noted in Part 2, the total annual value of all potential Part D/340B duplicate discounts ranges from $19.9 billion at 2025 prices, to $17.5 billion at Q2 2026 prices, to $16.6 billion at July 2026 prices. This is a measure of how significant the MFP/340B problem may be as the MFP becomes more fully implemented. With 20 additional drugs becoming subject to MFP annually beginning January 1, 2029, as many as 180 drugs may be subject to MFP by 2036. Accordingly, as MFP is more fully implemented, the vast majority of Medicare drug spending will be subject to MFP and will, therefore, risk generating MFP/340B duplicate discounts.

Some considerations might suggest that these Part D/340B calculations should be reduced to some extent. Some Part D drugs will not be subject to MFP because they have generic or biosimilar competition, certain orphan drugs are separately excluded from MFP, some MFP drugs may have 340B prices that are below the MFP prices, and additional drugs may experience list price reductions.

Other considerations reinforce our calculations, however, and indicate that they might prove to be too conservative. For example, the analysis does not incorporate likely increases in the number of Medicare beneficiaries, drug utilization by those beneficiaries, or the list prices of newly introduced drugs over time. Further, the Medicare claims sample used, though robust, does not include all Medicare Part D transactions. Finally, this analysis excludes all Medicare Part B drugs, many of which will also be subject to MFP as implementation proceeds.

Duplicate discount findings for the 25 drugs subject to MFP in 2026 and 2027

Although consideration of MFP/340B duplicate discounts for all Part D drugs is a useful means of understanding the potential scale of duplicate discounts that a rebate model could address, the Pilot itself only applies to the first 25 drugs subject to MFP. The current analysis of MFP/340B duplicate discounts specific to those drugs provides a means of assessing the near-term magnitude of duplicate discounts that the Pilot is intended to address.

Our findings demonstrate that MFP/340B duplicate discounts are quite large even for just the 2026 and 2027 MFP drugs. The combined MFP/340B duplicate discounts for the first 25 MFP drugs in their respective first year under MFP range from $10.7 billion at 2025 prices, to $8.6 billion at Q2 2026 prices, to $7.6 billion at July 2026 prices.

Although it is true that some of the 2026 MFP drugs will not be subject to MFP in 2027, the MFP/340B duplicate discounts are still quite large, even after adjusting for those exclusions. The potential MFP/340B duplicate discounts for 2027 are $9.3 billion at 2025 prices, $7.1 billion at Q2 2026 prices, and $6.1 billion at July 2026 prices.

Duplicate discount findings versus prior research

The MFP/340B duplicate discounts estimated in the current study are generally higher than prior estimates, even after list price decreases that occurred in 2026 are accounted for. Estimates from prior studies did not incorporate the reduced list price because those analyses were undertaken before those list price reductions occurred.

Using 2023 data, one prior study estimated $4.0 billion in MFP/340B duplicate discounts for the 10 drugs selected for 2026.³ Using 2024 data, another study estimated $5.2 billion in MFP/340B duplicate discounts for the 2026 and 2027 MFP drugs combined.⁴ Increasing the aforementioned $5.2 billion estimate by HRSA’s reported 23% growth in the 340B program in 2025 produces an updated estimate of MFP/340B duplicate discounts in 2027 of $6.4 billion.

Using list prices comparable to those used in these prior studies (i.e., the 2025 pre-reduction list prices), an estimated $10.7 billion in duplicate discounts would occur for the first year that the 2026 and 2027 MFP drugs were subject to MFP. That is $4.3 billion, or 67%, above the $6.4 billion adjusted estimate based on prior studies.

Indeed, the estimate in the current study remains somewhat higher than those from prior studies, even when reduced list prices are applied. For example, the current study found $8.6 billion in MFP/340B duplicate discounts for the first year that the 2026 and 2027 drugs are subject to MFP using Q2 2026 prices. That is $2.2 billion, or 34%, more than the comparison value from the prior study. Even when July 2026 prices are applied, the current study found $7.6 billion in MFP/340B duplicate discounts, $1.2 billion or about 19% more than the prior estimate.

It is only when an adjustment is made for the exclusion of some 2026 MFP drugs in 2027, a development that prior study could not have considered, that the current analysis yields a lower estimate. As noted in Part 2 of this series, the analysis of the remaining 2026 drugs and the 2027 drugs for 2027 shows MFP/340B duplicate discounts of $9.3 billion at 2025 list prices, $7.1 billion at Q2 2026 prices, and $6.1 billion at July 2026 prices.

Under this scenario, the current study’s results remain 45% higher at 2025 list prices and 11% higher at Q2 2026 prices than the adjusted results of the prior study. Only at July 2026 prices does the current study’s estimate become marginally lower (-5%) than the prior estimate.

The current and prior estimates may differ in part because the prior studies could not account for the subsequent list price reductions or MFP drug exclusions and because they used different data sources and methods. The current analysis uses national samples of pharmacy claims and drug sales, whereas the prior analysis uses a sample of 340B channel-management data together with assumptions applied to public data.

In any event, all of the findings in the current study and those in prior studies are well in excess of the implementation costs identified by HRSA and calculated based on HRSA’s discussion of the inputs. All of these analyses, therefore, support HRSA’s decision to move forward with the Pilot and its determination that the benefits of the Pilot outweigh the implementation costs.

Broader implications of the Pilot data

HRSA’s conclusion that the benefits of the Pilot outweigh its costs is reinforced further when one considers how the data generated under the Pilot may be used to address Medicaid FFS and managed care duplicate discounts and diversion. The 340B statute has long prohibited claims to 340B discounts where Medicaid rebates are claimed. Further, as noted in Part 1 of this series, the 340B statute prohibits the transfer of a 340B drug to any person or entity that is not a patient of the covered entity. Prior research demonstrates how significant these Medicaid/340B duplicate discounts and diversion are.

For example, Kalderos previously estimated Medicaid duplicate discounts for 2020 and 2021.^5,6 The midpoints of the ranges Kalderos calculated were $1.3 billion and $1.7 billion. When the growth in 340B program purchases from 2021 to 2025 (+128%) is considered,^7,8 the 340B/Medicaid duplicate discount estimate provided by Kalderos becomes $3.85 billion using the later calculation.

The current MFP/340B-focused analysis also does not consider diversion. Although 340B diversion is recognized as a significant problem by the government and others, no comprehensive calculation of diversion has been undertaken, in part because of limited HRSA auditing and the lack of data transparency that has marked the 340B program to date. ^9,10

Significantly, some estimates of one form of diversion have been undertaken. A subset of diversion cases involves situations where a 340B discount on the same drug provided to the same patient is claimed by multiple covered entities. A study determined a percentage range of Medicare Part D prescription fills that could involve 340B claims by multiple competing covered entities.¹¹ Applying that percentage range to the current difference in 2025 WAC value of 340B drugs and the 340B acquisition prices of those drugs yields diversion losses of $800 million to $1.6 billion for just this one form of diversion.

There are other reasons that this study likely underestimates the impact of duplicate discounts. For example, in this study, there was no consideration of duplicate discounts that result when a 340B drug is subjected to a Medicare inflation rebate. As noted earlier, the federal government imposes inflation rebates on Medicare Part D and Part B drugs, but it is not permitted to do so where the drug is subject to 340B pricing. Given that the Centers for Medicare & Medicaid Services has stated that those duplicate discounts may reach 35% of all the relevant utilization,^12(p32,641) those duplicate discounts could prove quite substantial.

Conclusion

Given the size of the MFP/340B duplicate discounts calculated in the current study, its findings validate the efforts to introduce transparency into the 340B program. The MFP/340B duplicate discounts calculated here are far higher than the Pilot’s costs. These findings support HRSA’s Pilot, its potential expansion, and parallel efforts by manufacturers to condition their offers of 340B prices on the submission of claims data as permitted by two federal appellate decisions.^13,14

References

1. Martin R, Hasan S, and Greenwalt L. When MFP meets 340B: how their interactions could reshape U.S. healthcare. IQVIA. 2025.
2. Sun C, Zeng S, Sarraille W, and Martin R. How will a rebate model impact cash flow in the 340B Drug Pricing Program? IQVIA. 2025.
3. Berkeley Research Group. Implications for duplication with the 340B channel. BRG Healthcare Publication. 2024.
4. Berkeley Research Group. Update on effectuation of the Maximum Fair Price in 2026 and outlook for 2027. BRG Healthcare Publication. 2025.
5. Kalderos. 2021 Annual Report: The 340B Drug Pricing Problem, the Medicaid Drug Rebate Program, and duplicate discounts. Kalderos Annual Report. 2021.
6. Kalderos. 2022 annual report: manufacturers are left in the dark when it comes to noncompliance (“conquering the great unknown”). Kalderos Annual Report. 2022.
7. Health Resources and Services Administration. [Response providing an estimate of annual 340B drug purchases]. Freedom of Information Act response to Adam Fein; August 2022. Available through Drug Channels. Accessed October 24, 2026.
8. Health Resources & Services Administration. 2025 340B covered entity purchases. July 2026. Accessed October 24, 2026.
9. Mulligan K. The 340B Drug Pricing Program: background, ongoing challenges and recent developments. USC Schaeffer Center for Health Policy & Economics. 2021.
10. Health Resources and Services Administration. Notice Regarding 340B Rebate Model Pilot Program. Federal Register, 91 Fed. Reg. 48,883. August 3, 2026.
11. Nikpay S, Bruno JP, and Carey C. Recent court ruling could increase the size and administrative complexity of the 340B program. Health Affairs Scholar. Vol 2(12), 2024.
12. Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services. Medicare and Medicaid Programs; CY 2025 payment policies under the Physician Fee Schedule and other changes to Part B payment and coverage policies; Medicare Shared Savings Program requirements; and Medicare Prescription Drug Inflation Rebate Program. 90 Fed. Reg. 32,641. July 16, 2025.
13. Sanofi Aventis v. United States Department of Health and Human Services, 58 F.4th 696 (3d. Cir. 2023).
14. Novartis Pharmaceuticals v. Johnson, 102 F.4th 452 (D.C. Cir. 2024).

Acknowledgements

We thank Kenneth Finegold, Kimberly Westrich, Yevgeniy Feyman, Jeanna Haw, and Luke Greenwalt for suggestions on an earlier draft.

Funding

This study was supported by the National Pharmaceutical Council, which reviewed the manuscript and provided feedback, but had no role in data collection, analysis, or the decision to publish. Full editorial control was retained by IQVIA.