Halting 340B funding would force 73% of hospitals to cut staff, study finds




The 340B Drug Pricing Program allows certain hospitals and other health care providers (“covered entities”) to obtain discounted prices on “covered outpatient drugs” (prescription drugs and biologics other than vaccines) from drug manufacturers. Manufacturers must offer 340B discounts to covered entities to have their drugs covered under Medicaid. The discounts are substantial. The Health Resources and Services Administration (HRSA), which manages the program, estimates that covered entities saved $3.8 billion on outpatient drugs through the program in fiscal year 2013. The 340B program has grown substantially during the past decade. Covered entities and their affiliated sites spent over $7 billion to purchase 340B drugs in 2013, three times the amount spent in 2005. The number of hospital organizations (a single organization includes a hospital and all of its eligible affiliated sites) participating in 340B grew from 583 in 2005 to 1,365 in 2010 and to 2,140 in 2014. The increase from 2010 to 2014 was driven by growth in the number of CAHs and other types of hospitals that became eligible for 340B in 2010 through the Patient Protection and Affordable Care Act of 2010 (PPACA). In 2014, about 45 percent of all Medicare acute care hospitals—including CAHs—participated in the 340B program.

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