Frequently Asked QuestionsEverything you could ever need to know about the 340B Drug Pricing Program.
What is the 340B program?The 340B Program is a drug discount program that enables covered entities to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services. The program, which was established through bipartisan legislation in 1992, operates on the simple principle of requiring pharmaceutical companies to provide drugs at a discounted price to certain types of non-profit safety net hospitals and clinics. These organizations then use the 340B savings to subsidize the cost of serving patients in their communities.
Who bene fits from the 340B program?The 340B program benefits real people — patients and community members in every part of the country. Non-profit safety net hospitals and clinics use 340B savings to subsidize the cost of serving more patients in their communities and to providing more comprehensive care. These services could include helping patients comply with their treatment regimens, supporting disease-specific outreach programs, staffing free care clinics, providing transportation or housing services or otherwise assisting patients in overcoming barriers to care. The 340B program helps ensure access to vital medical care, all without expanding Medicare or Medicaid coverage or creating new health care programs at taxpayer expense.
Is the 340B program working as Congress intended?Yes, the 340B program is working as Congress intended. The program was established through bipartisan legislation in 1992 with strong support from both political parties. When the program was founded, Congress itself noted that the goal of the program is “to enable [covered entities] to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”
Is the 340B program funded by taxpayers?No, the 340B program is not funded by taxpayers. The program requires pharmaceutical companies to provide drugs at a discounted price to certain types of non-profit safety net hospitals and clinics, allowing the organizations to do more with their limited dollars to benefit the communities that they serve. The 340B program benefits patients and communities, while costing taxpayers and the government nothing.
Is there transparency in the 340B program?Yes, there is transparency in the 340B program. To participate in the 340B program, eligible organizations and covered entities must register and be enrolled with the 340B program and comply with all 340B program requirements. The 340B statute allows the Health Resources and Services Administration to audit covered entities to ensure compliance. HRSA has now conducted more than 800 audits of covered entities. However, there is little manufacturer transparency in 340B. Manufacturers have complete freedom to hide their pricing information from the public. In 1990, Congress acquiesced to manufacturer demands to adopt an industry-specific law that keeps their drugs’ average price and best price in the marketplace completely hidden from public scrutiny.
Has the 340B program expanded inappropriately?No, it has not. The program has expanded, but not because of any misuse by covered entities. Congress increased the number of qualifying entities on three separate occasions — in 2003, 2005 and 2010. The expansion was limited to certain children’s hospitals, free-standing cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals – all critically important safety net institutions. The greatest increase in use of the 340B program was not only intentional and expected, but was the direct result of Congressional action.
What is the future of the 340B program?The 340B program is at risk of unprecedented change unless support for the program can be broadened beyond the 340B provider groups that have traditionally served as the program’s champions. Without a significant and sustained effort to raise public awareness of the benefits of the 340B program, the program faces an uncertain future. Community voices can best elevate the discussion about the 340B program.
FAQ Credit: Community Voices for 340B