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.

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