Medium: What’s the deal with 340B? | 340B Matters
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05 Sep Medium: What’s the deal with 340B?

“In 2014, 65.1 million people were insured by Medicaid, and the government program spent approximately $42 billion on prescription drugs. With that much money flying around, it’s not surprising that nearly 550 drug manufacturers are participating in the rebate program, given that it is a prerequisite to have their drug covered by Medicaid. After the $42 billion has been spent, the MDRP ensured the government received $20 billion in rebates, bringing the total net cost for Medicaid outpatient prescription drugs to $22 billion (Statista).

This program was such a success, that “in 1992, Congress extended to safety-net providers the same kind of relief from high drug costs” that it provided to Medicaid with the rebate program ( Section 340B of the Public Health Service Act became law, and required pharmaceutical manufacturers to enter a pharmaceutical pricing agreement (PPA), with the HHS secretary. “Under the PPA, the manufacturer agrees to provide front-end discounts on covered outpatient drugs purchased by specified providers, called ‘covered entities’, that serve the nation’s most vulnerable patient populations” ( Now these “covered entities” could receive the same rebates as the government insurance program.”

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