What is the 340B drug discount program?
The 340B program was established nearly three decades ago to help safety-net hospitals and clinics provide care to vulnerable or uninsured patients. Since then, the program has experienced rapid and unchecked growth, and there’s concern patients aren’t the ones benefiting from it.


340B enables health care providers, such as qualifying hospitals, federally qualified health centers (FQHCs) and federal grantees, to access medications at a discounted price. The program was intended to help these entities redirect the savings from 340B to expand care and benefit the patients who are most in need.

Let’s be clear — good actors within the program, such as FQHCs, safety-net clinics, and other federal grantees, provide much-needed care to patients who otherwise may not receive it. They regularly report to the government how they are doing so. Here are a few examples of providers that serve as the backbone of the safety-net program:

So the question is:


So the question is:



Many not-for-profit DSH hospitals are buying drugs at the 340B discounted price, charging patients the undiscounted price, and then they keep the difference. There is no clear evidence they are using that money to expand care to needy patients. Financial incentives and a lack of transparency have led many DSH hospitals and hospital systems participating in the program to acquire independent physician clinics and practices to increase the volume of drugs they can purchase at a steeply discounted price.

The result is 340B-driven hospital
consolidation, which means limited access and fewer choices for patients, particularly in rural communities.




A Patient’s Journey:
Present and Future

Let’s take a look at what it’s like to be a 340B patient today — the good and the bad. This will shed some light on the disparities within the program, and what’s at stake for patients around the country if the program isn’t fixed.
Click each person to explore their journey.

If 340B isn’t fixed, you can expect the landscape of health care choices to go from this…


Good actors, like grantees, provide access to care for America’s vulnerable or uninsured patients like John. They serve as the backbone of the U.S. health care safety-net.

But for patients like Rosie and Carol, 340B DSH hospitals’ abuse of the program is hurting their access to care. What happens if Rosie, Carol — or you — get sick and your local physician’s office is gone? 340B keeps growing, yet patients aren’t always getting the help they need. Instead, 340B is driving up costs for all patients.


340B is an important program that serves a critical safety-net role for our most vulnerable patients and communities. When the program works as intended, public health outcomes are improved. So how do we get the program back on track so it works for patients?

The good news is this: there are several commonsense ways that Congress and the Administration can improve 340B.

1. Define a 340B eligible patient

Today, lax program requirements have allowed some hospitals to game the program and claim discounts for medicines given to patients that weren’t even treated at a 340B facility. Clarifying the definition of a 340B-eligible patient will help ensure 340B DSH hospitals are using the program to help needy patients.

2. Transparency for 340B DSH Hospitals

Unlike federal grantees that are required to report how they use 340B to support the patients they serve, participating DSH hospitals face no reporting requirements. As a result, there is no way for the Administration to know if these hospitals are using the program appropriately. Reporting requirements are needed to provide a line of sight into hospital use of the program and to ensure 340B discounts are targeted to facilities serving vulnerable communities.

3. Restrict Contract Pharmacy Arrangements

While the program was created to support non-profit entities, for-profit retail pharmacies like Walgreens and CVS have flooded the program and are able to split some of the profit with hospitals. Policymakers should re-evaluate the role of contract pharmacies and determine if their participation is helping patients.


There is a lot of work that must be done to address the socioeconomic barriers to health care. Strengthening the 340B program is an important step toward restoring a critical safety-net and improving patient outcomes for America’s uninsured, low-income, and vulnerable communities. By advancing policies that will create greater accountability for 340B hospitals, Congress will level the playing field for all 340B participants and address the fundamental issues within the program that have led to rising costs for all patients.



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Rosie is a single mom living in the

Midwest who is fighting breast cancer. She was diagnosed after having her third child, and now she works two jobs — a waitress at night and a sales associate during the day. She relies on her community oncologist for treatments and visits her private office for much-needed care,

Rosie finds the oncology clinic welcoming, the nurses and doctors to be professional and friendly, and the costs meet her expectation. In between her two jobs, she is relieved she can get her treatment that close to home because it allows her to maintain her busy schedule.

When Rosie returns for her next appointment, she learns her local doctor’s office where she has been receiving her cancer treatments has been put out of business by the large 340B hospital a town over. She now has to drive an hour to get her treatment from health care professionals she finds impersonal and an environment that is unfamiliar. After her first treatment in the hospital outpatient office, she receives a costly, more expensive bill than what she was used to for her care.

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Carol is a retiree and proud grandmother of six, and she lives with her retired husband on a ranch in Arizona. She was recently diagnosed with rheumatoid arthritis — commonly known as RA. She relies on regular infusions that slow progression of her disease and keep it in remission, while improving her physical functioning and quality of life.

Shortly after being diagnosed with RA, Carol found an infusion clinic in her town where she could regularly receive her treatments. She likes how convenient the clinic is and finds the care provided to be very hands-on.

When Carol heads to her infusion center for her regular appointment, she finds it looks different. She checks at the front desk and learns the big hospital a town over has purchased the clinic. She thinks nothing of it but notices that her care seems less personalized. What’s worse, the bill she receives for her treatment is much higher than when the infusion clinic was independent.

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John is a young graphic designer who moved to a big city to launch his career. Four years after moving he was diagnosed with HIV. He visits the nearby Ryan White clinic to receive treatments. Since he is uninsured, this life saving clinic provides him with access to care he would otherwise not be able to afford.

John is able to receive the medications and treatment he needs at an affordable price at a clinic nearby with flexible hours to accommodate a city that works late. He is able to go after work and is grateful it fits in his busy schedule.

While trying to fit in his next visit before work, John is able to walk to his nearby clinic. He meets with his physician to go over his treatment. After exchanging pleasantries, he heads out to the reception area and looks at his bill. He smiles, folds up the piece of paper and puts it into his pocket. His medication and treatment costs remain the same.

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