The Truth About the 340B Drug Pricing Program

The congressionally created 340B Drug Pricing Program is one of the longest-standing tools to shield safety net hospitals and their patients from the impact of rising prescription drug costs. The program's reach and importance has expanded over time in accord with policymakers' intentional changes and with manufacturers' increasingly pricey drugs. Concerningly, some drug manufacturers have turned to unilateral actions to weaken the program and dramatically restrict its scope. These manufacturers are walking away from their commitment to the Medicaid and Medicare programs, often in flagrant violation of federal statute and federal agency direction. We urge lawmakers to continue working to ensure essential hospitals maintain access to up-front 340B discounts.

Key Programmatic Truths

1. Despite disinformation from manufacturers, 340B is working as Congress intended.

• Congress created 340B to help safety net providers "stretch scarce federal resources" to reach more patients and offer more comprehensive services.
• The program costs taxpayers next to nothing but provides enormous community benefit.
• These real-world impacts show 340B's value in enabling hospitals to meet community needs beyond their walls.

2. Program growth reflects drug price growth and compliant utilization-not abuse.

• Claims that 340B has "grown dramatically" ignore context. A primary driver of dollar growth is the increase of drug prices, regularly above inflation, by manufacturers.
• Hospitals that participate in 340B are more likely to offer specialty services like oncology than non-340B facilities. Enabling access to complex care is the exact intent of the 340B program.
• Growth also reflects patient access to care-a sign the program is functioning exactly as Congress intended. The 340B program is a policy success, not a flaw-no matter how much manufacturers might message otherwise.

3. Manufacturers are undermining the law at the expense of patients.

• Courts have repeatedly found that drug manufacturers have restricted access to 340B pricing at contract pharmacies, imposing burdensome data demands or cutting off discounts entirely.
• These actions seek to pad manufacturers' bottom lines and shift authority from HRSA to drug manufacturers.
• The 340B program establishes a clear requirement for pharmaceutical manufacturers to contribute to the care of Americans served by federal programs as a condition of having their drugs covered by Medicare and Medicaid.
• Altering the program would undermine the fundamental spirit of the agreement.