How Can 340B Pricing Help Healthcare Organizations Save On Medications?

How Can 340B Pricing Help Healthcare Organizations Save On Medications?


How Can 340B Pricing Help Healthcare Organizations Save On Medications.jpg

As prescription drug prices continue to increase, consumers are finding it increasingly difficult to pay for their medications. A federal program called the 340B Drug Pricing Program aims to help.

What Is The 340B Drug Pricing Program?

340B pricing is a social betterment program that provides underserved Americans with discounted drug prices.

It was created in 1992, after Congress passed the first Medicaid Drug Rebate Program. It mandated that pharmaceutical manufacturers provide Medicaid recipients with a rebate on their prescription drug costs. However, manufacturers failed to honor this arrangement.

Congress then went on to develop a failsafe measure to ensure these standards were maintained, which became known as 340B pricing. The federal government launched 340B pricing under the Health Resources and Services Administration. This plan is part of the government’s “safety net” initiatives, which provide affordable healthcare options to lower income individuals who are under-insured or uninsured.

How Does 340B Pricing Work?

The 340B program requires that drug manufacturers provide discounted outpatient drugs to a variety of healthcare organizations, including hospitals, HIV/AIDS programs, community hospitals, rural medical centers and others. These groups are known as “covered entities.”

The government must continuously monitor these facilities and reevaluate the criteria by which they are considered “covered.”

The 340B pricing program has grown in popularity, with the number of sites that receive covered designation increasing from 8,600 in 2001 to 38,000 in 2017[1]. It is just one of the many ways the federal government makes medications more affordable for Americans.

[1] Government Accountability Office, “Drug Discount Program: Update on Agency Efforts to Improve 340B Program Oversight,” GAO-17-749T, Published: Jul 18, 2017

The Truveris Patient Access Services team is committed to providing insights and analysis to help pharmaceutical brand teams make the most informed decisions. This post explaining 340B drug pricing was one of our most popular last year. We’ve updated it to better reflect the most current statistics and information from across the prescription drug landscape.


Topics: Trends, Insights & Analysis, Pharmaceutical Manufacturers, Prescription Drug News & Regulations - Pharma

Posted by

Elizabeth Bugayong

Elizabeth Bugayong is a member of Truveris’ Life Sciences team. In her role as Manager, Elizabeth leads the company’s efforts in delivering patient access programs for pharmaceutical companies. Elizabeth has a BS from Babson College and an MBA from the Kellogg School of Management at Northwestern University.