As a Strategic Hospital Advisor for RxBenefits, specializing in 340B, Sarah Hearn works with hospitals and health systems to help them leverage 340B to reduce their overall employee drug spend, as well as with commercial employers to mitigate the effect of 340B-related rebate loss to their pharmacy plan. She expands on her thoughts below.

Can you give a brief background on the 340B Drug Pricing Program, and the goal of the program?

The federal 340B Drug Pricing Program was enacted in 1992 in a bipartisan effort to enable safety-net health care institutions to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.   The law requires drug manufacturers to offer discounted prices (roughly 20%-60% below Wholesale Acquisition Cost, or WAC) to eligible safety-net health care facilities on certain outpatient drugs. In return, congress approved having Medicaid and Medicare Part B cover the participating manufacturers' product, a deal that has been highly profitable for drug manufacturers.

Savings generated through 340B allow safety-net institutions to carry out incredibly meaningful programs, such as funding free and low-cost medications, dental and primary care clinics that serve our most vulnerable citizens, as well as research into HIV/AIDS, diabetes, and cancer. It is also important to remember that none of these 340B savings provided to eligible health care institutions are taxpayer funded. One hundred percent of 340B savings are funded by Pharma which is mandated to offer these savings to sell their drugs to Medicare and Medicaid.