For years, the rebate process between PBMs, plan sponsors, and drug manufacturers has followed a relatively predictable path: establish pricing commitments, deliver medications, and pay out guaranteed rebates to plan sponsors.

But with the rise of 340B ESP and new cross-checking practices by manufacturers, that process has dramatically shifted. And many PBMs are finding themselves caught in the middle—on the hook for guarantees with little to no insight into what rebates will actually be paid.

Let’s break down what’s changed, why it matters, and what your organization can do to adapt.

What Is 340B ESP?

340B ESP is a vendor platform used by pharmaceutical manufacturers to collect voluntary claims data from 340B participants. Many drug manufacturers now require participation in 340B ESP to maintain access to discounted 340B pricing.

How It Works:

• 340B purchases and dispenses occur at contract pharmacies.
• Covered entities (340B participants) voluntarily submit claims data to 340B ESP, regardless of the software they use.
• As long as the entity continues to report data, they remain in good standing to access 340B pricing.

This process provides drug manufacturers with an aggregated view of all 340B activity—data they are now leveraging to deny rebate payments for duplicate discounts.

How Drug Manufacturers Are Using 340B ESP

Drug manufacturers use the 340B ESP database to cross-reference PBM rebate claims. If a claim appears in 340B ESP, it is flagged as a 340B transaction—and rebate payment is denied.

How It Used to Work:

1. PBMs identify eligible dispenses.
2. Data is submitted to a rebate aggregator.
3. Manufacturer receives invoice and issues payment.
4. Rebate aggregator pays the PBM.
5. PBM pays the plan sponsor.

How It Works Now:

1. PBMs identify eligible dispenses.
2. Data is submitted to a rebate aggregator.
3. Manufacturer receives invoice and cross-checks with 340B ESP data.
4. Claims found in 340B ESP are denied.
5. Manufacturer only pays for non-340B claims.
6. PBM receives a reduced payment and must still fulfill plan sponsor guarantees.

Why This Creates a Major Problem for PBMs

Lack of visibility.
PBMs no longer have insight into which rebate claims will actually be approved. This introduces uncertainty into the rebate guarantee model and puts PBMs at financial risk.

Rebate guarantees were once a safe strategy—but in this new environment, they can easily turn into a loss leader if not managed carefully.

What Can PBMs Do to Fix This?

1. Renegotiate Rebate Guarantee Terms

Some PBMs have already started adjusting their contracts to reflect the evolving rebate landscape. Aligning terms with current manufacturer practices is the first step to protecting your financial exposure.

2. Partner With a 340B Claim Verification Solution Like RxTrail

RxTrail offers PBMs the visibility they need. By verifying submitted claims against 340B ESP and other data sources, PBMs can proactively identify which claims are likely to be rejected.

This removes guesswork and helps PBMs:

• Avoid over-promising on guarantees.
• Prevent rebate invoice denials.
• Create a more predictable and accurate financial model.

How RxTrail Claim Verification Works

RxTrail connects directly with 340B participants or integrates with 340B ESP via a technical API to gather verified claim data. When PBMs submit claims-to-invoice data for guarantee purposes, RxTrail cross-references the information to identify:

• Claims with 340B activity that will likely be denied.
• Claims with no 340B footprint that are eligible for rebate payment.

This allows PBMs to submit cleaner rebate files—and manage expectations with plan sponsors more effectively.

Ready to Regain Control?

If your organization is feeling the pressure from increased rebate denials, RxTrail can help. We’ll work with your team to assess the current gaps in your process, identify risk, and implement a verification solution that provides clarity and control.

📩 Contact us today to explore partnership options and start navigating this new rebate landscape with confidence.

‍