340B DRUG PRICING PROGRAM
Back to GlossaryDefinition
A federal program that allows eligible health entities to buy outpatient drugs at discounted prices.
Summary
The 340B Drug Pricing Program is a federal safety net program created in 1992 that requires pharmaceutical manufacturers to provide outpatient prescription drugs at significantly discounted prices to eligible healthcare organizations that serve vulnerable populations. These 'covered entities' include federally qualified health centers, rural hospitals, children's hospitals, and other safety net providers. The program aims to stretch scarce federal resources and enable these organizations to provide more comprehensive services to underserved communities.
Usage Context
Understanding the 340B program is crucial when studying healthcare policy, pharmaceutical economics, safety net healthcare delivery, and federal programs designed to improve access to medications for vulnerable populations.
Common Confusions
- Thinking 340B applies to all medications when it only covers outpatient drugs
- Confusing 340B with Medicaid drug rebates or other discount programs
- Assuming all hospitals qualify when only specific safety net providers are eligible
- Believing patients must be uninsured to benefit from 340B pricing
- Misunderstanding that 340B is about institutional savings, not direct patient discounts
