The Pharmaceutical Pricing Agreement (PPA) that is signed by manufacturers of covered outpatient drugs participating in the 340B program (and MDRP) does not prohibit rebates or mandate any mechanism for ensuring that 340B covered entities do not pay more than the statutory 340B ceiling price. As such, the legal status quo is that rebates are permissible as a mechanism to achieve appropriate prices for covered drugs purchased by covered entities under 340B.
Furthermore, HRSA's own guidance supports the conclusion that the status quo permits use of the rebate mechanism. See e.g., Notice Regarding Section 602 of the Veterans Healthcare Act of 1992 - Rebate Option, Health Resources and Services Administration, 63 Fed. Reg. 35239 (June 29, 2998). Under that guidance, voluntary rebate agreements with covered entities that provide at least the minimum statutory discount and do not contain requirements inconsistent with section 340B and published program guidelines are considered consistent with the section 340B rebate program. Id at 35240. Under this guidance, rebates are currently in use (with the Secretary's approval) by State AIDS Drug Assistance Programs (ADAPs).