340B Drug Pricing Program: An Overview

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.

This explainer looks at the history of the program, breaks down how it works, and notes relevant policy issues.