The Department of Health and Human Services moved to drop its contested 340B rebate pilot after facing legal challenges from hospitals and providers. HHS’ withdrawal follows court action that had blocked the pilot and amplifies provider complaints that the plan would create cash-flow burdens and administrative complexity for safety-net care. Providers and trade groups framed the decision as a victory, arguing the pilot jeopardized financial stability for hospitals that serve vulnerable populations. Legal filings and provider statements suggest the episode will shape future HHS attempts to revise drug pricing rebate mechanics; stakeholders now expect more negotiated or incremental policy approaches rather than sweeping pilots.