Hospital 340B Drug Program Explained

Under the 340B Drug Program, the Department of Health and Human Services Requires Pharmaceutical Manufacturers to Give Discounts on Medications to Hospitals That Provide Care to Low Income Patients.

The 340B Program Mandates a 13% Discount on Generics and a 23% Discount on Brand-Name Medications Sold to Hospitals.

The 340B Program Was Put Into Place in 1992 as Part of the Veterans Health Care Act.  1,300 Hospitals Participate.

Approximately $30B Worth of Medications Were Sold at a Discount to Hospitals as Part of the 340B Program in 2019.

According to a PhRMA Industry Study, Hospitals Are Paid 2X Their Cost for the Drugs... for a Total of $60B in Payments to Hospitals for 340B Medications.

Total US Hospital Spending in 2019 Was $1.23T.  If Hospitals Were Required to Sell the 340B Drugs at Cost to Insurance Carriers and Employers, it Would Lower Overall Spending on Hospital Services by 2.45%

Sources: The ABCs of 340B: A 101 Webinar on th...; https://www.drugchannels.net/2020/06/... https://www.prnewswire.com/news-relea... https://fred.stlouisfed.org/series/RE... https://www.340bhealth.org/members/34... https://www.fiercehealthcare.com/hosp... https://www.hhs.gov/coronavirus/cares....

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