340B Pricing/Covered Outpatient Drugs
The 340B Drug Pricing Program is a federal program that requires drug manufacturers participating in the Medicaid drug rebate program to provide covered outpatient drugs to enrolled "covered entities" at or below the statutorily-defined ceiling price. This requirement is described in Section 340B of the Public Health Service Act and codified at 42 USC 256b.
Generally, the 340B Program includes the following outpatient drugs:
- FDA-approved prescription drugs;
- Over-the-counter (OTC) drugs written on a prescription;
- Biological products that can be dispensed only by a prescription (other than vaccines); or
- FDA-approved insulin.
The purpose of the 340B Program is to permit covered entities "to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." H.R. Rep. No. 102-384(II), at 12 (1992). Participating covered entities report savings that range between 25-50% of Average Wholesale Price (AWP) for covered outpatient drugs as a result of 340B discounts.
Please view HRSA's website for additional information and a complete list of covered entity types.