Congress created the 340B drug discount program as a response to the high pharmaceutical costs faced by safety net hospitals. Section 340B of the Public Health Service Act requires pharmaceutical manufacturers that participate in the Medicaid program to provide covered outpatient drugs at a discounted rate to safety net and other health care facilities serving low-income, vulnerable communities or remote rural areas. Purchasing outpatient pharmaceuticals through the 340B discount drug program allows safety net and rural hospitals to continue to meet the local needs of their patients and communities and "to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."
Many Catholic health ministry hospitals rely on the 340B discount to free up funding, for example, to run free and low-cost clinics; to provide infusion and other services in remote or low-income areas; to offer generous financial aid policies as well as programs that provide low-cost or free prescriptions; to maintain critical services that operate at a loss; and to support community benefit programs meeting the identified needs of their service areas. The 340B program plays a crucial role in providing access to health care in the communities served by the ministry. For more information about CHA’s position and activities on this issue see below, as well as our policy brief 340B Drug Discount Program.