Feds release proposed changes to 340B program

Guidance will be open for public comment for 60 days

Federal regulators on Thursday released long-awaited proposed "mega-guidance" on the 340B Drug Pricing Program, which includes changes that could limit when providers would receive discounted drugs.


The federal 340B program requires drug manufacturers to provide outpatient drugs to eligible health care providers at discounts ranging from 20% to 50%. The program, created by Congress in 1992 and expanded via the Affordable Care Act, focuses on hospitals with disproportionately low-income patient populations. About 40% of U.S. hospitals are eligible to participate in the program, which saved providers about $3.8 billion in medication costs in 2013, according to the Health Resources and Services Administration (HRSA).


However, the program has come under scrutiny, with some questioning the amount of charity care participating hospitals are providing.

Hospitals say GAO criticism of 340B 'misses the mark'

Draft guidance details

On Thursday, HRSA released draft guidance that would increase from three to six the number of conditions for patients to be eligible for discounted medicines. For example, eligible providers would only be able to receive discounted medicines for patients who:

  • Receive health care services at a provider that is both registered for the program and listed on the public 340B database; and
  • Receive services from a provider that is either an independent contractor for the covered entity or is employed by the covered entity.

The draft guidance would also clarify that discounted drugs are not permitted for patients treated by a provider that is only affiliated with a 340B-eligible entity or referred by a 340-eligible entity, but is not eligible for the program itself.


In addition, the guidance would clarify that drugs would only be eligible for program discounts if they are billed to insurers as outpatient prescriptions.


The guidance will be open for public comment for 60 days.



The American Hospital Association (AHA) says it is reviewing the draft guidance. Ashley Thompson, AHA's acting senior executive for policy, says, "We want to make certain that the new requirements do not overburden hospitals and strike a balance between hospitals and pharmaceutical companies for ensuring program integrity."


Beth Feldpush, SVP of advocacy and policy for America's Essential Hospitals, says that there "are some provisions in the guidance that appear to be restricting hospitals' ability to use the program and potentially in large ways."


Feldpush adds, "For our members that rely on the savings, I could see where if HRSA narrowed the program so much, a hospital could say the costs to run this program may outweigh (the benefit of) participation in it" (Ross Johnson, Modern Healthcare, 8/28 [1]; Ross Johnson, Modern Healthcare, 8/28 [2]; AHA News Now, 8/27; Ellison, Becker's Hospital CFO, 8/27).

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