Federal Program Requires Drug Makers to Offer Reduced Prices to Some Healthcare Providers

July 8, 2021


ACHI Staff

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The federal 340B Drug Pricing Program requires prescription drug manufacturers to provide drugs to certain healthcare organizations at heavily reduced prices as a condition of having their products covered by Medicaid. The program is intended to stretch federal resources as far as possible, expand access to prescription drugs for vulnerable populations, and protect clinics and hospitals from drug price increases.

Our new explainer looks at the history of the program, breaks down how it works, and notes relevant policy issues, including debates over:

  • How much financial benefit hospitals should receive under the program.
  • How the program impacts hospitals serving high proportions of low-income patients.
  • Whether the program should apply to drugs for low-income patients who are ineligible for Medicaid because they live in states that have rejected Medicaid expansion.
  • Whether there is sufficient transparency around the process.
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