All terms
340B Drug Pricing Program
Federal program providing discounted drugs to safety-net providers.
Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026
Definition
340B requires drug manufacturers to offer outpatient drugs at discounted prices to covered entities including disproportionate-share hospitals, FQHCs, and other safety-net providers. Primarily a drug program, it intersects with combination products and physician-administered drug-device pairs. What the regulation says
The 340B Drug Pricing Program is authorized by Section 340B of the Public Health Service Act. The Health Resources and Services Administration (HRSA) is responsible for administering the program, including oversight of covered entities and manufacturers to ensure compliance with 340B requirements. HRSA issues guidance and maintains a public database for registered covered entities and participating manufacturers, as outlined in official program documents.
What this means in practice
Affects pricing strategy for combination products and physician-administered therapeutics distributed through 340B-eligible sites.Examples
- A manufacturer of a pre-filled syringe (a combination product) containing an outpatient drug must evaluate if that drug component is subject to 340B pricing when sold to a covered entity.
- A disproportionate-share hospital, as a 340B covered entity, purchases insulin pens at a discounted 340B price for its eligible outpatients.
- A pharmaceutical company ensures its contract pharmacies adhere to 340B program rules for dispensing eligible drugs to covered entity patients.
Common pitfalls
- •A common pitfall is misinterpreting which specific drug-device combination products are subject to 340B discounts, leading to incorrect pricing or compliance issues.
- •Failing to maintain accurate records of 340B eligible purchases and distributions can result in HRSA audits and potential sanctions.
- •Manufacturers may incorrectly classify drugs, including those in combination products, as exempt from 340B discounts.
- •Covered entities might not have robust systems to prevent diversion of 340B-purchased drugs to ineligible patients or for ineligible uses.
- •Not staying updated on HRSA guidance and policy changes can lead to inadvertent non-compliance.
Frequently asked questions
The primary goal is to enable eligible healthcare providers, known as 'covered entities,' to purchase outpatient drugs at discounted prices, thereby stretching federal resources and providing more comprehensive services to their communities.
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Primary references
3 sourcesLink health: 3 verified· last checked 2026-06-20
HRSA·1AdvaMed·1AMA·1
- 1
HRSA 340BVerifiedHRSAhrsa.gov
- 2
AdvaMed - Payment & CoverageVerifiedAdvaMedadvamed.org
- 3
AMA CPT ResourcesVerifiedAMAama-assn.org
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