The Reach of the 340B Drug Pricing Program

Drugs are expensive, and providing them to underinsured or uninsured patients is difficult. To reduce costs for primarily tax-funded drug providers, the federal government created the relatively obscure 340B drug pricing program in 1992. This program applies only to outpatient medications and is available to nonprofit or public hospitals or clinics that meet the criteria for serving a disproportionate share of low-income patients. More than 20 years later, 340B pricing is available to 18 215 health care facilities in the United States, including one-third of all hospitals,¹ not all of which may be interested in charity care. Despite the broad distribution of the plan, only 2% of all drugs purchased in the United States fall under 340B discounts.²