What is 340B?

The 340B Drug Pricing Program (340B Program) is a federal program that requires drug manufacturers, who participate in the Medicaid Drug Rebate program, to also provide reduced 340B prices on covered outpatient drugs for 340B-covered entities. The purpose of the program is to give covered entities the ability to stretch scarce federal resources as far as possible to reach more eligible patients and provide more comprehensive services. Participation in the 340B program can result in cost saving and revenue generation for health centers. Covered entities receive front-end discounts rather than a rebate later on in the payment process.

The National Association of Community Health Centers (NACHC) found that health centers save between 15-60% on their prescription drug costs by using the 340B program, depending on the volume and type of drugs purchased. Savings associated with the program may be used to provide medications at reduced/no cost to eligible patients, expand the list of available medications, serve additional low-income patients, and offer more comprehensive or new health-related services. 

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