340B Drug Pricing Program Fact Sheets

Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to health care organizations that care for patients in vulnerable communities. 

For nearly 30 years, the 340B Drug Pricing Program has provided financial help to safety-net hospitals to manage rising prescription drug costs. Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to qualifying health care organizations that care for many uninsured and low-income patients.

Learn what the HHS 340B Drug Pricing Program is and what 340B hospitals are. The program allows 340B hospitals to stretch limited federal resources to reduce the price of outpatient pharmaceuticals for patients by providing 340B drug pricing discounts and expand health services to the patients and communities they serve.

The COVID-19 pandemic has altered hospitals’ payer mix, which for some hospitals has temporarily lowered their disproportionate share hospital (DSH) percentage. These changes have unfortunately threatened the ability of some hospitals to maintain their eligibility for the 340B program – a vital program that allows participating hospitals to stretch their resources to provide comprehensive services to their patients.