• Issue Brief
  • January 7, 2016

340B Drug Pricing Program

Children’s hospitals depend on the 340B Drug Pricing Program to provide vulnerable patients access to lifesaving medications

The federal 340B Drug Pricing Program (340B program) enables children’s hospitals to provide care for the program’s intended beneficiaries—vulnerable, low-income patients.

  • The 340B program supports safety net providers, such as children’s hospitals, in their mission to serve low-income, uninsured and under-insured patients while reducing federal and state health care expenditures. To date, 44 freestanding children’s hospitals have enrolled in the program.
  • By providing outpatient pharmaceuticals at discounted rates, the 340B program enables enrolled hospitals to provide reduced-price drugs to patients, expand comprehensive health services, and offset losses from serving patients who cannot pay. 
  • Children’s hospitals provide a large amount of care to children who are low-income, underinsured, uninsured or unable to pay. More than half of all children’s hospital patients rely on Medicaid, which on average pays approximately 30 percent less compared to Medicare.
  • Since becoming eligible covered entities six years ago, children’s hospitals have upheld high standards of 340B program integrity and remain fully committed to improving program integrity by supporting the administration’s ongoing audits and annual recertification process.  

340B guidance

On Aug. 28, 2015, the Health Resources and Services Administration released a proposed omnibus guidance for the 340B program. Among other things, the guidance addresses patient definition and drugs eligible for purchase under 340B. CHA is concerned the proposed guidance leads to more questions than answers. CHA believes the proposed guidance will make the program overly burdensome and complex, which could have a huge impact on covered entities and their abilities to provide care to the neediest patients. 

For additional resources about the 340B Drug Pricing Program, visit the 340B Coalition’s website.

Association Contacts: Amanda Cook(202) 753-5328, and Liz Parry(202) 753-5392