What the 340B Program Does
The 340B program requires pharmaceutical manufacturers to sell outpatient drugs at discounted prices to eligible health care facilities. Those facilities include hospitals that treat a large share of patients with low income and federally supported clinics and specialized programs.
Participating facilities buy drugs at discounted prices but typically receive larger reimbursements from public and private insurers. The resulting difference generates net revenues. Facilities may use those revenues to expand services, but the program statute does not specify how 340B revenues must be used—for example, it does not restrict their use to services for patients with low income.
The Health Resources and Services Administration (HRSA) administers the 340B program. In 2021, roughly 50,000 facilities participated. HRSA also contracts with a “prime vendor” to manage distribution, negotiate discounts, and support participating facilities. About 90 percent of facilities that participated in the 340B program also participated in HRSA’s Prime Vendor Program.
Recent Developments:
Thurs, May 7, 2026:
The Great 340B Healthcare Grift. A federal judge shows how this hospital ‘discount’ fleeces drug makers and patients. - WSJ
Thurs, Feb 5, 2026:
HHS dumps 340B rebate pilot, ending AHA lawsuit - Modern Healthcare
Thurs, Oct 23, 2025:
Congressional Budget Office testimony - CBO