Big 4 Federal Purchasers
Definition
The ‘Big 4’ refers to the four largest federal entities engaged in providing health care services: the Department of Veterans Affairs (VA), the Department of Defense (DoD), the Public Health Service (PHS, including the Indian Health Service), and the Coast Guard. These entities receive the deepest federal drug discounts through the Federal Ceiling Price (FCP) mechanism.
The Big 4 are relevant to 340B in two ways. First, prices paid by the Big 4 are excluded from the Medicaid best price calculation, similar to 340B prices. Second, the Federal Supply Schedule (FSS) and FCP represent a parallel federal drug pricing framework that exists alongside the 340B program.
Understanding the Big 4 helps covered entities contextualize where 340B fits within the broader federal drug pricing landscape.
Frequently Asked Questions
Why Big 4 Federal Purchasers Matters
The Big 4 framework helps covered entities understand the federal drug pricing ecosystem and why 340B prices are structured the way they are. Prices paid by the Big 4 are excluded from best price, which is the same design principle applied to 340B prices.
How Virtue 340B Uses It
Virtue 340B references the Big 4 when explaining the federal drug pricing framework to covered entity clients.