If you’re not deeply entrenched in the pharmacy world, you probably haven’t heard the phrase “340B.” But in recent years, the 340B program, created in 1992 under the Public Health Service Act, has been the subject of a lot of back-and-forth between drugmakers, hospitals, and the federal government.
What is it? The 340B program requires Medicaid-participating drugmakers to sell drugs at discounted prices to certain hospitals and clinics.
How good of a deal are we talking? And who gets it? Hospitals and clinics that participate in the program are called “covered entities,” and treat a large number of low-income, uninsured patients. Those facilities can receive a 25%–50% discount, according to the trade group the American Hospital Association (AHA).
But why? The idea is that since those facilities primarily treat low-income and uninsured patients, the covered entities have limited financial resources. Further, a drug discount would help hospital and clinic administrators stretch their resources to provide care for more patients.
Sounds simple enough, right? Well, not everyone loves the program.
Keep reading here.—MA
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