340B Health



The Health Resources & Services Administration (HRSA) has referred six drug companies - Eli Lilly, AstraZeneca, Sanofi, Novo Nordisk, Novartis, and United Therapeutics - to the Department of Health and Human Services Office of Inspector General (OIG) for potential fines for their continued violations of federal law requiring 340B drug pricing program discounts on eligible drugs dispensed at community pharmacies. If OIG determines the drug companies knowingly and intentionally overcharged safety-net providers, it can assess civil monetary penalties (CMPs) that can total nearly $6,000 per violation. Two federal district courts have ruled that drug companies cannot unilaterally refuse these discounts or impose conditions on them.


What is 340B?

Section 340B of the U.S. Public Health Service Act provides that drug manufacturers that choose to participate in Medicare and Medicaid sell certain outpatient drugs to eligible safety-net providers at a discount. These providers then use the savings to “stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” Learn more about 340B.

Drug Manufacturers Are Restricting Required 340B Discounts

12 drug manufacturers – Eli Lilly, AstraZeneca, Sanofi, Novo Nordisk, Novartis, United Therapeutics, Boehringer Ingelheim, Merck, UCB, Amgen, AbbVie, and Bristol Myers Squibb – have imposed unilateral restrictions on 340B discounts when drugs are dispensed at community pharmacies or have announced their plans to do so. 

These actions are in violation of the 340B statute, which states that manufacturers must provide 340B pricing on any eligible drug to any eligible covered entity regardless of how the hospital intends to dispense the drug.

Facts About the 340B Community Pharmacy Dispute 

  • About 25% of 340B discounts for safety-net hospitals come through these partnerships. This figure is more than 50% for rural hospitals.
  • Nearly two-thirds of hospitals expect to lose 15% or more of their 340B savings due to drug manufacturer denials of required discounts.
  • Without access to 340B discounts, millions of patients are at risk of losing access to a wide range of services they rely on to stay healthy.
  • Patients with diabetes and the safety-net providers who care for them are bearing the brunt of the drug companies' actions. Read more in our report.

News of How Drug Manufacturer Actions Harm Patient Care  


  • Read a letter from more than 800 hospitals participating in 340B to HHS urging the federal government to appeal a court decision on restrictions for 340B discounts. 
  • Read a letter from six national organizations representing hospitals and pharmacists urging HHS to order six drug companies to restore 340B discounts and impose civil monetary penalties. 
  • HRSA letters to Eli Lilly, AstraZeneca, Sanofi, Novo Nordisk, Novartis, and United Therapeutics announcing on May 17, 2021, that drug companies denying 340B discounts to safety-net hospitals and providers on drugs dispensed at community pharmacies are in violation of the law.
  • Read a letter from seven national organizations to HHS.  
  • Read a letter from more than 1,100 safety-net hospitals participating in 340B to HHS. 
  • Read a letter from a bipartisan group of 28 U.S. senators to HHS. 
  • Read a letter from a bipartisan group of more than half of the members of the U.S. House of Representatives to HHS.   
  • Read a letter from more than 60 advocacy groups for patients and social justice to HHS. 
  • Read a letter from a bipartisan group of 29 state attorneys general to HHS.
  • Read how Eli Lilly reaped a 22% revenue increase in the fourth quarter of 2020, partially by restricting 340B discounts to safety-net hospitals.