Research and Transparency Required for 340B Program

The federal 340B Drug Pricing Program allows qualifying entities that treat low-income and uninsured patients to buy outpatient prescription drugs at a discount according to a statutory formula. A keynote presentation at AMCP Nexus 2023 called for more transparency from the program, as well as research to elucidate whether the program is actually benefitting vulnerable populations.

The program was created in 1992 as part of the Public Health Service Act as a way to help safety-net health care providers do more with their resources so they can help more financially vulnerable patients and provide more comprehensive services. Discounts vary widely by drug but can exceed 50%. Since 2005, 340B drug spending has grown from $2.4 billion to $53.7 billion in 2022, according to the presentation, generating $52 billion in savings for qualifying entities.

The program has grown for many reasons, including an increase in Medicaid inpatient days, more contract pharmacies and affiliated sites becoming eligible, higher drug prices, and improved strategies by entities to maximize their use of the program.

Because of this growth and a lack of transparency, the program has become rather controversial, the speakers said, citing “a lack of certainty and clarity over how it is supposed to work.” The presentation outlined many aspects that lack clarity or raise concerns, including difficulty identifying 340B status at the time of dispensing, worries over duplicate discounts, and the financial and logistical impacts on stakeholders. They posited that a lack of guidance and reporting requirements has led to a situation where there is “no comprehensive, centralized understanding of whether the ‘patient benefit’ part of the program is working.”

The speakers called for more transparency and research to better elucidate how the program benefits vulnerable patients. They asked attendees to ponder several questions: Should these discounts be used only to benefit low-income uninsured patients directly, or should they generate revenue to subsidize care for this population? Should the program allow the revenue to be used for any purpose? Who should be eligible for the program: only low-income individuals who are treated by eligible entities, anyone treated by those entities regardless of income and insurance, or perhaps even people receiving care from providers loosely affiliated with eligible entities?

Dave Lacknauth, PharmD, MBA, MS, FACHE, executive director of pharmacy services at Broward Health; Rory Martin, PhD, senior principal at IQVIA; Donald E. Nichols, PhD, principal, health policy and systems research, at Genentech, Inc.; and John M. O’Brien, PharmD, MPH, president and chief executive officer of the National Pharmaceutical Council, presented this information and more during the meeting.


Lacknauth D, Martin R, Nichols DE, O’Brien JM. Understanding the 340B Program: Policy, Patients, and Practical Implications for Managed Care Pharmacists. Session K2. Presented at AMCP Nexus 2023; Oct. 16‒19, 2023; Orlando, Fla.