Understanding the 340B Program
What is the 340B Program?
The 340B Program is a federal initiative in the United States that allows certain eligible healthcare organizations, known as covered entities, to purchase outpatient prescription drugs at discounted prices.
What Do I Need to Know about the 340B Program?
The 340B Program is a federal initiative passed in 1992 as part of the Public Health Services Act, that allows certain eligible healthcare organizations, known as covered entities, to purchase outpatient prescription drugs at discounted prices, typically between 20-50%. Since 1992, it has grown to be the second-largest federal prescription drug program, only second to Medicare Part D.
These organizations include:
- Federally Qualified Health Centers
- Ryan White HIV/AIDS Program Grantees
- Hospitals
- Specialized clinics
Patients who receive care at these facilities, regardless of their insurance status, may access 340B pricing on outpatient drugs. The 340B program can also help support covered entities, like Community Health Centers, in their overall mission to provide vital medical services and care as they are allowed to reinvest the income they get from the 340B program back into patient care, as required by law.
However, not all other 340B sites spend 340B profits in ways that benefit patients. The 340B program lacks transparency. At the Autoimmune Association, we are concerned that a recent review of claims data indicates only 1.4 percent of 340B-eligible prescription discounts were passed on to patients. PBMs and insurers have found ways to lower reimbursement to shift 340B revenue to themselves, and may even claim manufacturer rebates that were intended to increase savings on prescriptions for patients. There are also reports of some covered entities paying vendors to build out hospital-owned specialty pharmacies so they can increase their 340B revenue in poor neighborhoods and then reinvest that money into more affluent communities.
Help Us Change Policy!
We are working on a solution to help ensure that costs are lowered for patients and that safety-net providers can continue to serve their communities. We want to hold PBMs accountable!
If you’re interested in this issue, please reach out to the Autoimmune Association policy team by completing the form below to learn more about advocacy opportunities at the state and federal level.