Fact Sheet: The 340B Drug Pricing Program

For 25 years, the 340B Drug Pricing Program has provided financial help to safety-net hospitals to manage rising prescription drug costs.

Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to health care organizations that care for many uninsured and low-income patients. These organizations include community health centers, children’s hospitals, hemophilia treatment centers, critical access hospitals (CAHs), sole community hospitals (SCHs), rural referral centers (RRCs), and public and nonprofit disproportionate share hospitals (DSH) that serve low-income and indigent populations.

The program allows 340B hospitals to stretch limited federal resources to reduce the price of outpatient pharmaceuticals for patients and expand health services to patients and the communities they serve. For example, hospitals use the 340B savings to provide free care for uninsured patients, offer free vaccines, provide services in mental health clinics, and implement medication management programs and community health programs.

The AHA:

  • Opposes efforts to scale back, significantly reduce the benefits of, or expand the regulatory burden of the 340B program.
  • Believes the 340B program is essential to helping safety-net providers stretch limited resources to better serve their communities.
  • Supports program integrity efforts to ensure this vital program remains available to safety-net providers.

Related Resources

Special Bulletin
Member
The Centers for Medicare…
Special Bulletin
The Centers for Medicare…
AHA Center for Health Innovation Market Scan
The Purchaser Business Group on Health (PBGH), a coalition of about 40 large private and public employers including Walmart, Disney, Costco and Microsoft,…
AHA Center for Health Innovation Market Scan
Walmart recently partnered with the consumer-facing health care platform Transcarent to provide low-cost prescription drugs, telehealth, optical and other…
Letter/Comment
Public
This letter to CMS reiterates AHA’s position that the agency’s Most Favored Nation Proposed Rule should be withdrawn.
Letter/Comment
Public
AHA, others express support of the 340B federal drug pricing program and strongly encourage Congress to protect the program as they consider broader changes to…