What is the 340B Discount Drug Program

Established in 1992, the 340B Drug Pricing Program was formulated by the U.S. Congress and signed into law by then-President George H. W. Bush as a means to provide low-cost outpatient drugs to qualified patients. This particular government program is open to healthcare service providers sought by people with finite budgets as a method for such organizations to present regulated federal financial sources and to allow these health care providers provide more programs.

After the Medicaid Drug Pricing Program was created in 1990, Congressional hearings in 1992 uncovered a predicament. The 1990 program mandated drug companies to give out rebates to states covering Medicaid expenses in order for drugs from the drug companies to be covered by Medicaid. Subsequent discounts were based on drug costs to individuals that weren't covered by Medicaid and not on previous voluntary discounts from drug companies, so drug pricing actually increased to Medicaid recipients.

The Congressional remedy was the 340B Drug Pricing Program, where any drug company participating in the Medicaid Drug Rebate Program must offer marked down drug rates to qualified health care facilities determined to be safety net health care providers. These types of discounts assist patients who need discounted pharmaceuticals, but who aren't eligible for Medicaid. Read More