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How 340B discounts work

Rebecca Davison   |     September 9, 2015   |   SHARE THIS

340BSpotlight_HeaderRecognizing the importance of access to prescription medicines, Congress created the 340B program in 1992 to help vulnerable or uninsured patients served by safety net facilities get the medicines they need at a discount.

So how do 340B discounts work? The premise of the program is simple: biopharmaceutical manufacturers provide 340B hospitals with discounted medicines, which are then available to patients of the facility. Watch our video here.

When patients are insured, their insurers then reimburse the hospital for the medicines at the full negotiated rate, with the patient potentially seeing no benefit. Instead, some 340B hospitals are pocketing the extra funds as profit. 

spotlightOur new chart pack – Biopharmaceuticals in Government Programs – explores the 340B program and where it has veered off course, including unsustainable program growth, lagging charity care rates and an increased presence of contracted pharmacies in wealthier neighborhoods—where the patient population the program aims to help isn’t living.

Unfortunately, insufficient guidance, historically weak oversight and other factors have led to dramatic growth in the program, driven by large hospitals. The program’s current structure means that this growth has come without any clear benefit for patients and is threatening the long-term sustainability of the program.

340BSpotlight_ThumbnailLearn more about 340B at PhRMA.org/340B and stay tuned to 340B Spotlight posts for more on this important program and the changes needed to ensure it benefits those it was intended to help.   

Rebecca Davison

Rebecca Davison Becca is a Director in the Policy and Research Department at PhRMA focusing on Medicaid, the Affordable Care Act and 340B. Prior to getting her Masters of Public Policy at the McCourt School of Public Policy at Georgetown University, she worked for the American Academy of Pediatrics and for Senator Christopher J. Dodd of Connecticut. In her spare time, Becca enjoys traveling and cooking and is a die-hard New York Yankees fan.

Topics: 340B, 340B Spotlight

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