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340B Drug Pricing Program

What is the 340B Drug Pricing Program?

The 340B Drug Pricing Program, created by the U.S. government in 1992, offers financial support to hospitals that serve vulnerable patient populations by managing increases in prescription drug prices. Currently, over 2,500 hospitals participate in the 340B program.

Pharmaceutical companies participating in Medicaid provide outpatient drugs to qualifying patients at a significant discount in order to improve access to necessary treatments. In order to participate in the 340B program, eligible patients and other entities must register and comply with stated government requirements.

Why is the 340B Drug Pricing Program important in healthcare?

This program is especially significant for safety net hospitals, whose patients already face difficulties accessing necessary healthcare. The 340 Drug Pricing Program enables care providers to stretch limited financial resources via discounted pharmaceutical purchasing process. Many hospitals participating in this program use the cost savings to provide various care services to low-income and uninsured patients.

Currently, the 340B program only accounts for about 4 percent of the total value of the U.S. drug market by payments. The program continues to grow with the expansion of outpatient care.