340B Drug Pricing Program
Definition
The 340B Drug Pricing Program is established under Section 340B of the Public Health Service Act and administered by the Health Resources and Services Administration (HRSA) through its Office of Pharmacy Affairs (OPA). It requires drug manufacturers participating in the Medicaid Drug Rebate Program to sell covered outpatient drugs to enrolled covered entities at or below a maximum price called the 340B ceiling price.
The program was created to help safety-net providers stretch scarce federal resources, reach more eligible patients, and deliver more comprehensive services. Eligible organizations include disproportionate share hospitals, federally qualified health centers, Ryan White HIV/AIDS program grantees, and other federally designated health programs.
Covered entities must prevent two core statutory violations: diversion (dispensing 340B drugs to ineligible patients) and duplicate discounts (receiving both a 340B price reduction and a Medicaid rebate on the same drug). Maintaining auditable records, written policies and procedures, and robust internal controls is essential. HRSA audits can result in corrective action plans and repayment obligations.
The program has faced increasing scrutiny from drug manufacturers, Congress, and federal regulators, with ongoing legal activity around contract pharmacy arrangements and manufacturer restrictions. A well-documented, defensible compliance posture is more critical than ever.
Frequently Asked Questions
Why 340B Drug Pricing Program Matters
The 340B program generates substantial savings that covered entities use to fund patient care and support underserved communities. Those savings are only protected when the program is run correctly. Compliance gaps can trigger HRSA audits, findings, and repayment obligations that erase years of savings and damage institutional credibility.
How Virtue 340B Uses It
Virtue 340B specializes exclusively in 340B program compliance, auditing, and optimization. Every service we offer is built around helping covered entities run defensible, well-documented 340B programs that can withstand HRSA scrutiny and protect long-term savings.