What Is the 340B Discount Drug Program?

Signed into law in 1992, Section 340B of the Public Health Service Act established the 340B Drug Pricing Program, a program that supports our nation’s safety-net health care providers. 

Under the 340B Drug Pricing Program, health centers, hospitals, Ryan White clinics and certain other types of providers (collectively known as “covered entities”) buy outpatient prescription drugs at a discount. The savings covered entities realize through this program help them stretch the scarce federal resources they receive for committing to serve historically marginalized and underserved patients. Covered Entities reinvest that savings into their services and programs. 

The 340B Program allows safety net providers to stretch their limited resources further. Qualified safety net providers purchase prescription medications at a 340B discounted price and are reimbursed by insurance for the full cost of the medication. Cost savings from the 340B Program allow safety net providers to cover care for uninsured patients & provide services to support more holistic patient needs (such as transportation for medical appointments.)

Without the 340B Program, Covered Entities risk not being able to provide care to our nation’s most vulnerable populations, including those most impacted by the HIV epidemic in the United States.

Your Questions Answered

The 340B Program allows eligible HIV service organizations to give their patients access to drug prescriptions like preexposure prophylaxis (PrEP), testing, and other holistic care needs like transportation assistance and food pantries. Without it, many of these organizations would not be able to operate, meaning that millions of Americans living with and vulnerable to HIV would not have access to needed care options.
Eligibility for 340B is set out in federal law and includes health care safety-net providers like health centers, certain hospitals, clinics and other designated entities. More specifically, these institutions include hospitals with a significantly disproportionate number of low-income patients, certain children’s hospitals and cancer hospitals, sole community hospitals, rural referral centers, critical access hospitals, and federal grantees from the Health Resources and Services Administration, the Centers for Disease Control and Prevention, the Department of Health and Human Services’ Office of Population Affairs, and the Indian Health Service. Many agencies serving the HIV community are eligible through participation in HRSA and CDC programs, including the federal Health Centers program, the Ryan White Care Act program, and the Section 318 Sexually Transmitted Disease Prevention and Control Program.
The 340B Drug Pricing Program is a federal program that does not utilize any federal funding or taxpayer money, other than a small congressional appropriation to the Office of Pharmacy Affairs to administer the program. Instead, it allows eligible health organizations to stretch federal funding they are already receiving by purchasing drugs at discounted prices.
According to data from the Congressional Budget Office, about 31 million Americans reported being uninsured in 2020, meaning nearly 1 in 10 Americans lack access to the coverage they need to live healthy and productive lives. Millions more Americans, while they may have coverage, live in designated underserved areas or are members of underserved communities, which are the communities served by 340B covered entities. By enabling safety-net providers to continue their operations in largely underserved communities, the 340B Drug Pricing Program helps to strengthen the country’s public health security and to remove structural barriers that perpetuate health disparities.

We want to maintain the integrity of the 340B program in order to ensure that people living with and at risk of HIV have access to health care. We believe: 

  • The 340B Program should maintain the current definition of “patient”, as stipulated by HRSA’s 1996 guidance.
  • The 340B Program should continue to support the ability of covered entities to serve all patients who walk in their doors.
  • Drug manufacturers should not be permitted to dictate restrictions on pharmacy locations at which the 340B Program can operate.
  • Pharmacy benefit managers and insurance companies should be prohibited from discriminating against covered entities simply by virtue of their status as participants in the 340B Program.
  • Drug Companies should be prohibited from implementing punitive restrictions designed to shore up their profits at the expense of patients and communities in need.

The how to preserve 340B section goes into more detail about each of these points.

Real People. Real Stories. Real Change.

"'It’s kind of mind-boggling to be in a place where everything in my life is working. I get to express my creativity in a way that makes a difference, and I’ve never been healthier and I’ve never been more stable."
~ Nicholas
After 4 months on his medication regimen, Frank’s viral load is now undetectable – he is able to live life, be there for his family, and contribute to his community just as he did before his diagnosis.
~ Excerpt from Frank's Story
Sophie came to DAP Health immediately after her partner, Dan, received a life-altering HIV diagnosis. Sophie didn’t have health insurance, but she knew she needed PrEP to stay in control of her health. She was reeling and she was scared.
~ Excerpt from Sophie's Story


Contact policy@aidsunited.org to speak with an expert.

Join the 340B Work Group

Contact dkackloudis@aidsunited.org for more information.