The 340B Drug Pricing Program is vital for safety-net healthcare providers, allowing
them to enhance access to medications, reduce medication costs for vulnerable
populations, and reinvest savings into community health initiatives. The 340B Drug
Pricing Program is a U.S. federal program established under Section 340B of the
Public Health Service Act of 1992. It requires pharmaceutical manufacturers that
participate in the Medicaid Drug Rebate Program to provide outpatient drugs to
eligible healthcare organizations, referred to as covered entities, at significantly
reduced prices.
230,000
contract pharmacy/covered entity relationships
connect more than 32,000 pharmacies with
12,000+ 340B covered entities in 2025.
90%
of CVS and Walgreens retail locations
function as 340B contract pharmacies.
Source: Drug Channels Institute
Source: Drug Channels Institute
80%
of total 340B purchases are attributed to
Disproportionate Share Hospitals, one of
the six 340B-eligible hospital types.
Source: Drug Channels Institute
RXinsider’s Market Intelligence
Report highlights are extracted from
the Pharmacy500 340B Third-Party
Administrators 2026 Report.
KEY ELEMENTS OF THE 340B PROGRAM:
Purpose:
• To enable covered entities to stretch scarce resources, improving access
to medications for uninsured or underinsured patients while maintaining or
expanding services.
Covered Entities:
Eligible organizations include:
• Federally Qualified Health Centers (FQHCs)
• Ryan White HIV/AIDS Program grantees
• Critical Access Hospitals (CAHs)
• Disproportionate Share Hospitals (DSHs)
• Rural Referral Centers (RRCs) and others.
Discounted Pricing:
• Drug Manufacturers provide outpatient drugs at reduced costs, typically
calculated based on Medicaid pricing formulas, allowing covered entities to
achieve savings.
Program Integrity and Compliance:
• Covered entities must ensure drugs purchased under 340B are dispensed only
to eligible patients.
• Participants are required to avoid duplicate discounts (e.g., claiming 340B
pricing and Medicaid rebates simultaneously) and diversion (providing 340B
drugs to ineligible patients).
Contract Pharmacy Model:
• Covered entities can partner with external pharmacies to dispense 340B drugs
on their behalf, expanding access to the benefits of the program.
Oversight and Administration:
• Administered by the Health Resources and Services Administration (HRSA).
• Covered entities and manufacturers are subject to audits to ensure compliance.
POINT-OF-SALE
(POS) SYSTEMS
INTEL REPORT HIGHLIGHTS
INTEL REPORT HIGHLIGHTS
340B THIRD-PARTY
ADMINISTRATORS
(TPAs)
INTEL REPORT HIGHLIGHTS
INTEL REPORT HIGHLIGHTS
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