What is 340B and how does it work?
The federal 340B Program is a drug price control program that allows qualifying providers, generally hospitals, specialty clinics and their associated outpatient facilities serving uninsured and low-income patients in rural communities, to purchase outpatient drugs from manufacturers at discounted prices.
What is 340B in healthcare?
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.
Who qualifies for 340B?
Who qualifies and what is the process? Covered entities are allowed to provide 340B drugs only to individuals who are “patients” of the entity, the covered entity must have a relationship with the individual, which HRSA defines as maintaining the individual’s health care records.
Why is 340B bad?
Bad actors in the 340B program have realized that they can make substantial profits by buying deeply discounted cancer drugs, which are then reimbursed by Medicare and private insurers at full cost — providing hospitals with up to 100% profit margins on these expensive drugs.
Are all drugs 340B eligible?
According to the 340B statute, FQHCs (and other covered entities) may only provide 340B purchased drugs to individuals who are “patients” of the entity. As a result, policymakers often talk about the “patient definition” as the tool for determining eligibility for 340B drugs.
Is 340B only for Medicare?
These discounts only apply to purchases of covered outpatient drugs. Covered entities are allowed to dispense the discounted medication both to uninsured patients, and patients covered by Medicare or private insurance.
Is 340B only outpatient?
The 340B Program is an outpatient drug program. Enrolled covered entities have the responsibility to ensure that drugs purchased under the 340B Program be limited to outpatient use and provided to individuals who meet the requirements of the current patient definition.
Is 340B going away?
Major drug companies such as AstraZeneca and Eli Lilly announced they would no longer provide 340B-discounted products to contract pharmacies.
Is 340B good or bad?
Ultimately, abuse of the 340B program has begun to harm the very poor, uninsured, and underinsured patients it was meant to serve. Today, nearly half the hospitals in the United States are in the 340B program, even though research has shown that most provide very little charity care.
HOW DO 340B pharmacies make money?
Participation in the 340B program shifts a pharmacy’s profit source from dispensing spreads to per-prescription fees paid by a 340B-qualified entity. In some cases, the pharmacies share in the profits generated by 340B prescriptions, which raises further questions about who benefits from the program.
When did 340B start?
1992
The 340B Drug Pricing Program is a US federal government program created in 1992 that requires drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at significantly reduced prices.
What are 340B acquired drugs?
The 340B Drug Pricing Program allows certain hospitals and other healthcare providers to purchase drugs and biologicals (other than vaccines) that are administered in a hospital outpatient department from drug manufacturers at discounted prices.
