340B Drug Pricing Program
Q: What is the 340B Drug Pricing Program?
A: The 340B Drug Pricing Program refers to a federal statute that requires drug manufacturers to sell outpatient drugs to eligible health care centers, clinics, and hospitals (termed “covered entities”) at a reduced price. This requirement is described in Section 340B of the Public Health Service Act, which was enacted in 1992 to provide financial relief to those facilities that provide care to the medically underserved.
You may hear the terms "PHS Pricing," "340B Pricing," and "602 Pricing,” all of which refer to the same program and the same discount. The term "340B ceiling price" is the highest price the statute allows a manufacturer to charge a participating 340B entity. Nothing in the statute prevents a manufacturer from selling covered drugs to eligible entities at prices lower than the ceiling price.
Q: What drugs are covered under the 340B Drug Pricing Program?
A: “Covered outpatient drugs” under the 340B Drug Pricing Program can include any drug used in an outpatient setting, except vaccines. Both prescription drugs and over-the-counter (OTC) drugs for which a prescriber writes a prescription can be covered by the 340B program, or purchased by covered entities at or below the 340B statutory ceiling price. Medical/surgical supplies are not covered, except that Family Planning clinics (receiving Title X grant funding) can receive 340B rates for contraceptive intrauterine devices (IUD). Also, the 340B Prime Vendor Program has negotiated special pricing on some medical supply products for participating entities.
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