340B News & Regulatory Updates — May 2026

The Most Important 340B Developments of May 2026

Published by 340bprogram.com | May 31, 2026
Sources: Becker’s Hospital Review, HFMA, 340B Report, BioPharma Dive, ACI Monthly 340B Update, Health & Life Sciences News, Federal Register, Kodiak Solutions

MAY 2026 OVERVIEW

May 2026 was the month the data submission crisis went from a compliance issue to a legal and financial emergency. Eli Lilly sent warning letters threatening hospitals with the loss of 340B pricing over in-house pharmacy data submission failures. Bristol Myers Squibb became the fifth manufacturer to expand data requirements to in-house pharmacies. AstraZeneca ended in-house pharmacy exemptions. And in a bombshell development on May 21, three major hospital systems filed federal lawsuits against CVS Health — alleging a secret scheme to divert approximately $250 million in 340B savings. On Capitol Hill, PhRMA executives attacked 340B hospitals at a congressional hearing while lawmakers largely passed on addressing the program. And Illinois — in a stunning turnaround — went from introducing a bill to restrict 340B savings to passing a contract pharmacy access law in the final hours of the legislative session.

May 2026 was not a month for passive monitoring. It demanded action.

🚨 TOP STORY #1 — LILLY SENDS WARNING LETTERS, THREATENS LOSS OF 340B PRICING

May 12, 2026 — Eli Lilly Issues Data Ultimatum to Hospitals

Eli Lilly sent warning letters to covered entities that had not yet complied with its in-house pharmacy claims data submission requirements — which took effect February 1, 2026. Lilly sent warning letters to providers over in-house 340B claims data reporting requirements, giving hospitals a five-day deadline to submit outstanding data or face suspension of 340B pricing access for Lilly’s entire product portfolio. 340B Report

What Lilly is requiring: Compliance with Lilly’s policy entails submitting both pharmacy and medical claims data within 45 calendar days of the original dispense date for most drugs, and 60 days for certain infused, injected or clinically administered specialty medications. The company expanded its claims data requirement in February to include in-house pharmacy dispensing, citing duplicate discount concerns under the IRA, and says covered entities received a two-month implementation window and multiple reminders.

The hospital response: The American Hospital Association proposed a neutral, government-administered clearinghouse for data collection on May 13, which Lilly did not respond to. 340B Health, an organization representing more than 1,600 participating hospitals, called the move “a huge kick in the face to the nation’s safety-net hospitals” and urged HRSA to warn Lilly it faces enforcement action. Becker’s Hospital Review

The broader implications: At least five other drugmakers have announced similar in-house claims data policies, according to the AHA — meaning compliance pressure is likely to spread beyond Lilly in the weeks ahead. The common thread across all manufacturer data policies is straightforward — access to discount pricing is increasingly conditioned on the ability to produce verified claim-level data on schedule and through a specified portal. Becker’s Hospital Review

⚠️ Action required — immediate: If your covered entity dispenses any Lilly products through an in-house pharmacy and has not yet enrolled in 340B ESP (340besp.com) and begun submitting claims data — act today. Loss of 340B pricing for Lilly’s full portfolio would be a significant financial event for any hospital-based covered entity.

🚨 TOP STORY #2 — THREE HOSPITAL SYSTEMS SUE CVS FOR $250 MILLION IN DIVERTED 340B SAVINGS

May 21, 2026 — Mount Sinai, Michigan Medicine, and University of Kansas Health System File Federal Lawsuits Against CVS

New York City-based Mount Sinai Health System, Ann Arbor-based Michigan Medicine, and Kansas City-based University of Kansas Health System filed separate federal lawsuits against CVS Health on May 21, alleging the company ran a secret scheme to divert approximately $250 million in 340B savings between 2020 and 2025. Becker’s Hospital Review

What the lawsuits allege: The hospitals claim that CVS Health — operating simultaneously as a pharmacy benefit manager, a specialty pharmacy, and a contract pharmacy partner — used its vertically integrated position to systematically divert 340B savings that should have benefited covered entities and their patients. The University of Kansas allegation includes a claim that CVS terminated its contract pharmacy agreement after the hospital raised concerns about the arrangement.

Why this matters beyond the three plaintiffs: These lawsuits raise fundamental questions about transparency in vertically integrated PBM arrangements where the same corporate family controls the PBM, specialty pharmacy, and claims adjudication platform. The cases raise broader questions about transparency in vertically integrated PBM arrangements where the same corporate family controls the PBM, specialty pharmacy, and claims adjudication platform. Becker’s Hospital Review

For independent contract pharmacies: This litigation reinforces that the 340B contract pharmacy space has serious transparency problems at the top of the market. For independent pharmacies operating as contract pharmacies — who do not have the conflicts of interest that large chains do — this is an opportunity to differentiate yourselves as trustworthy, transparent partners for covered entities.

⚠️ Action required: Any hospital or covered entity with a CVS Health contract pharmacy arrangement should review its 340B specialty drug reimbursement flows and financial records for the period 2020–2025. If you have experienced unexplained reductions in 340B revenue or early contract terminations by CVS, consult a 340B compliance attorney about your legal options.

🔬 MANUFACTURER POLICY CHANGES — MAY 2026

May 1, 2026 — Bristol Myers Squibb Becomes Fifth Manufacturer to Expand In-House Data Requirements

BMS on Wednesday became the fifth pharmaceutical manufacturer to announce its expanding 340B data requirements to in-house pharmacy use. Effective May 1, 2026, BMS requires covered entities to submit claim-level data elements for all 340B utilization of certain covered outpatient drugs, covering dispenses and administrations from both entity-owned pharmacies and designated contract pharmacies. 340B Report

BMS products affected: The requirement covers BMS’s 340B-eligible portfolio of covered outpatient drugs. This includes high-volume oncology, cardiovascular, and immunology medications. Contact your BMS account representative or check the 340B ESP platform for the complete list of affected NDCs.

The pattern is now clear: Lilly (February), Novo Nordisk (April), AstraZeneca (May 1), BMS (May 1) — four manufacturers expanded in-house pharmacy data requirements in rapid succession. Novo Nordisk implemented a similar policy to Lilly effective April 1 (but does not list North Dakota and West Virginia as exempted states). AstraZeneca ended exemptions for in-house pharmacy drugs with respect to its reporting requirement effective May 1, and Bristol Myers Squibb acted likewise. Healthcare Financial Management Association

May 1, 2026 — AstraZeneca Ends In-House Pharmacy Exemptions

AstraZeneca announced in April that beginning May 1, it would require claims data on all 340B purchases across 19 of its products, including Farxiga and Symbicort, for in-house pharmacy dispenses. The May 1 effective date arrived with no reversal — AstraZeneca’s in-house pharmacy exemptions are now removed.

Covered entities dispensing AstraZeneca products in-house: Must submit claims data to 340B ESP within the required timeframe. Products affected include some of the highest-volume 340B drugs in the country — diabetes, respiratory, and cardiovascular products where AstraZeneca is a major manufacturer.

May 2026 — The In-House Data Requirement Scoreboard

As of May 31, 2026, the following manufacturers have active in-house pharmacy claims data requirements:

Eli Lilly — Effective February 1, 2026. 45 days for most products, 60 days for specialty. Warning letters sent in May to non-compliant entities.

Novo Nordisk — Effective April 1, 2026. Full product portfolio. No state exemptions announced.

AstraZeneca — Effective May 1, 2026. 19 products including Farxiga and Symbicort. Exemptions removed.

Bristol Myers Squibb — Effective May 1, 2026. All 340B-eligible covered outpatient drugs. Entity-owned pharmacies and contract pharmacies.

Pfizer — Attestation and claims data requirements effective March 31, 2026, including validation of no wholly-owned pharmacy.

⚠️ What to watch in June and beyond: At least five other drugmakers have announced similar in-house claims data policies, according to the AHA — meaning compliance pressure is likely to spread beyond these five in the weeks ahead. Every covered entity should assume that its remaining major manufacturers will announce similar requirements before the end of 2026. Becker’s Hospital Review

⚖️ COURT DECISIONS — MAY 2026

May 2026 — Mississippi Wins Again — Novartis Rehearing Request Denied

A New Orleans federal appeals court recently denied a major pharmaceutical manufacturer’s request to reconsider a ruling in favor of Mississippi’s 340B contract pharmacy access law. This is the third time Mississippi’s law has survived a manufacturer legal challenge — it is now one of the most litigation-tested and legally durable state contract pharmacy protection laws in the country. 340B Report

Risk level — Mississippi: 🟢 Very Low — multiple court victories at the district and appellate level

May 5–18, 2026 — State Contract Pharmacy Litigation Activity

Active litigation proceeded across more than 50 340B cases in federal and state courts during May 2026. Key developments during this period include:

New Mexico — A drug manufacturer challenging a New Mexico state law governing contract pharmacy arrangements filed a notice of supplemental authority in the district court case. The supplemental authority filing signals the manufacturer believes recent court decisions in other circuits support its preemption arguments.

Utah — In a case brought by a drug manufacturer challenging Utah’s contract pharmacy access law, the state government filed a motion to dismiss the manufacturer’s lawsuit. Utah is arguing the federal preemption claims that succeeded in West Virginia do not apply under Utah’s specific statutory framework.

Washington State — Active litigation by AbbVie and Novartis against Washington’s new S.B. 5981 law (signed March 25, effective June 10) continued in district court. Washington filed its initial response to the manufacturer challenge in May.

Hawaii — Consolidated proceedings by AstraZeneca, PhRMA, and AbbVie against Hawaii’s contract pharmacy law were active in May. The AstraZeneca bid to block the law had been denied in April. The consolidated plaintiffs filed procedural motions in May while awaiting a merits schedule.

May 2026 — North Dakota — Federal Judge Permanently Blocks 340B Law

A federal judge permanently blocked North Dakota’s 340B contract pharmacy access law. This follows the West Virginia 4th Circuit loss and creates another state where manufacturers may reimpose contract pharmacy restrictions. Becker’s Hospital Review

Risk level — North Dakota: 🔴 High — law permanently blocked, manufacturer restrictions may reimpose

⚠️ Action required — North Dakota covered entities: Contact your 340B compliance consultant immediately to assess which manufacturer restrictions may be reimposed now that the state law is permanently enjoined. The October 1–15, 2026 OPAIS window may be relevant if you need to adjust your contract pharmacy arrangements.

May 2026 — Oklahoma — Federal Judge Blocks Law One Day Before Taking Effect

A federal judge blocked Oklahoma’s 340B contract pharmacy access law one day before it was set to take effect. Oklahoma’s law was enjoined based on the same federal preemption arguments that succeeded in West Virginia and North Dakota. Becker’s Hospital Review

Risk level — Oklahoma: 🔴 High — law blocked before taking effect

The Oklahoma Attorney General announced plans to appeal the ruling. Covered entities in Oklahoma should treat the state as currently unprotected and review their contract pharmacy arrangements accordingly.

🏛️ CONGRESSIONAL ACTIVITY — MAY 2026

May 2026 — PhRMA Executive Attacks 340B Hospitals at Congressional Hearing — Lawmakers Pass

A top Pharmaceutical Research and Manufacturers of America executive urged U.S. House lawmakers Wednesday to “look further into” the 340B drug pricing program, touting the drug industry trade group’s repeated and contentious claim that hospitals profit off of 340B drug markups. The hearing was focused on the prescription drug supply chain broadly — but PhRMA used its testimony to target 340B hospital practices specifically. 340B Report

The outcome: Lawmakers largely passed on directly addressing the 340B program. The hearing produced no new legislative action on 340B. This is consistent with the broader congressional dynamic in 2026 — major Congressional 340B action unlikely in 2026, but Trump administration policies could still affect the program, health policy experts say.

What PhRMA is arguing: The trade group continues to claim that 340B covered entities — particularly large academic medical centers and integrated health systems — use 340B savings to generate profit rather than passing discounts directly to patients. Covered entities dispute this characterization and point to the broad range of patient services funded by 340B savings.

For independent pharmacies: The congressional hearing’s focus on hospital markups and large health system profits is actually favorable for independent community pharmacies. The critique is directed at large hospitals — not at the independent pharmacy contract pharmacy model, where the margins are modest and the community health impact is direct and visible.

🗺️ STATE LEGISLATIVE UPDATES — MAY 2026

Illinois — A Complete Turnaround in One Month

This is one of the most dramatic state-level reversals of the year. In February, an Illinois Democratic lawmaker introduced a sweeping 340B bill that would have required covered entities to report detailed information and use most of their 340B savings on direct discounts for low-income patients — a provider-hostile measure that sparked strong pushback. By the end of May, Illinois had completely reversed course.

Illinois state lawmakers late yesterday overwhelmingly passed a 340B contract pharmacy access bill and separate 340B reporting measure in the final hours of the legislative session. The contract pharmacy access bill prohibits manufacturers from restricting 340B pricing at Illinois contract pharmacies. The reporting measure requires covered entities to report 340B program utilization data annually. 340B Report

Current status: Both bills were sent to the governor for signature. If signed, Illinois becomes one of the largest states in the country with a contract pharmacy access law — a significant development given Illinois’s large number of FQHCs, safety-net hospitals, and independent pharmacies.

Risk level — Illinois (if signed): 🟡 Medium — new law, manufacturer challenges expected

Mississippi — Three-For-Three in Legal Challenges

Mississippi’s contract pharmacy access law has now survived three separate manufacturer legal challenges at multiple levels of the federal court system — district court, appellate court rehearing denial, and full appellate review. Mississippi covered entities and contract pharmacies can operate with high confidence in their state law protections.

State Law Scorecard — End of May 2026

Fully protected — law in effect and upheld: Arkansas, Louisiana, Mississippi, Minnesota, Tennessee, Missouri, Oklahoma (before block), and others

Protected — law in effect, litigation ongoing: Hawaii, Colorado, Washington, Nebraska, Utah, Vermont, Oregon, Idaho, South Dakota, Rhode Island, Maine, Illinois (pending governor signature)

Law blocked or permanently enjoined: West Virginia, North Dakota, Oklahoma

No law enacted: Virginia (vetoed twice), California, Texas, Georgia, Ohio, Pennsylvania, Indiana

Expiring June 30: Kansas — contingency planning required immediately

📊 REGULATORY UPDATES — MAY 2026

May 2026 — HRSA Administrator Silent on 340B at NACHC Conference

HRSA Administrator Engels was silent on 340B during NACHC Policy Conference remarks — a notable absence of comment at the national conference of Federally Qualified Health Centers, whose members are among the program’s largest covered entities. The silence was interpreted by covered entity advocates as a signal that HRSA is in a holding pattern while the rebate model RFI comment record is reviewed. 340B Report

May 2026 — Community Voices for 340B Launches Litigation Defense Fund

A covered entity advocacy organization called Community Voices for 340B launched a Litigation Defense Fund for contract pharmacy challenges — providing legal and financial resources to smaller covered entities and contract pharmacies who face manufacturer lawsuits or restriction actions but lack the resources of large hospital systems.

For independent pharmacies: If your covered entity partner is a small FQHC or community health center facing manufacturer restrictions, the Community Voices for 340B Litigation Defense Fund may be able to provide assistance. Contact information available at communityvoicesfor340b.org.

May 2026 — 340B Program Reaches $100 Billion in Purchases Milestone

As of April 1, 2026, the 340B Program includes 15,249 covered entities and 49,214 associated sites. HRSA confirmed that the program has reached $100 billion in purchases at discounted 340B pricing — a historic milestone that both demonstrates the program’s massive scale and fuels the political pressure for reform and greater oversight.

📅 KEY DATES COMING IN JUNE 2026

June 10, 2026 — Washington State’s new contract pharmacy access law takes effect — AbbVie and Novartis lawsuits remain pending

June 30, 2026 — Kansas contract pharmacy protection law expires — if no renewal, manufacturer restrictions may reimpose immediately on July 1

July 1–15, 2026 — Next OPAIS contract pharmacy registration window — program start date October 1, 2026

June 2026 — Watch for governor’s signature on Illinois contract pharmacy access bills

June 2026 — Watch for First Circuit ruling on Maine and Rhode Island 340B contract pharmacy law appeals (oral arguments held in May)

June 2026 — Oklahoma Attorney General’s appeal of the law-blocking ruling expected to be filed

⚠️ MAY 2026 URGENT ACTION CHECKLIST

The volume of changes in May 2026 requires immediate action from every covered entity and contract pharmacy. Work through this checklist before June 1:

☐ Confirm your 340B ESP enrollment and data submission is current for all Lilly, Novo Nordisk, AstraZeneca, BMS, and Pfizer products

☐ If your covered entity received a Lilly warning letter — respond immediately and submit all outstanding claims data

☐ If you have a CVS Health contract pharmacy arrangement — review your 340B reimbursement records for 2020–2025

☐ If you are in Kansas — assess contingency plans for losing state contract pharmacy protections on July 1, 2026

☐ If you are in North Dakota or Oklahoma — review which manufacturer restrictions may now apply without state law protection

☐ Contact your 340B compliance consultant to assess exposure to new in-house pharmacy data requirements from manufacturers not yet on your radar

💊 HOW THIS AFFECTS YOUR 340B PATIENTS — AND HOW BLISTER CARDS HELP

May 2026 demonstrated that the 340B program is simultaneously being attacked from multiple directions — manufacturer data requirements, court defeats in North Dakota and Oklahoma, CVS diversion allegations, and congressional pressure. The financial and compliance burden on covered entities is growing month by month.

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🔗 KEY SOURCES FOR MAY 2026

Becker’s Hospital Review — 340B 2026 Tracker — beckershospitalreview.com

HFMA — 340B Claims Data Requirements — hfma.org

340B Report — 340breport.com (subscription recommended for full coverage)

ACI Monthly 340B Update — aci340b.com

BioPharma Dive — Lilly Data Ultimatum — biopharmadive.com

Health & Life Sciences News — This Week in 340B — healthlifesciencesnews.com

340B ESP Data Platform — 340besp.com

Community Voices for 340B Litigation Defense Fund — communityvoicesfor340b.org

340B Prime Vendor Program — 340bpvp.com | 1-888-340-2787

Information in this update is provided for general educational purposes by 340bprogram.com, published by Medication Packaging Solutions LLC, Clearwater, Florida. Sources include HRSA, U.S. federal courts, Forvis Mazars, Feldesman Tucker, Quarles Law, HFMA, and other publicly available resources. This is not legal or compliance advice. For compliance-specific guidance, consult a qualified 340B compliance consultant or healthcare attorney. Published: January 31, 2026.