340B Health


Image of patients with the word Protect Patients. Stop 340B Cuts.

Drug Companies Are Cutting Required 340B Discounts

Since 2020, more than 20 drug companies - AbbVie, Amgen, AstraZeneca, Bausch Health, Bayer, Biogen, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly, EMD Serono, Exelixis, Gilead, GlaxoSmithKline, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Sanofi, UCB, and United Therapeutics – have imposed unilateral cuts on 340B discounts to safety-net hospitals when drugs are dispensed at community or specialty pharmacies.

The Health Resources & Services Administration (HRSA) has referred companies to the Department of Health and Human Services Office of Inspector General (OIG) for potential fines for violating the 340B law. Each fine can total nearly $6,000 per violation. U.S. federal courts are considering lawsuits that several of the drug companies have filed to stop the federal government from enforcing the 340B law.


Lost 340B Savings Are Hurting Safety-Net Hospital Patients

A 340B Health report found drug company 340B cuts are stripping billions of dollars from the health care safety net and are harming patient care. The report found:

  • Safety-net hospitals lost $1.1 billion in 340B savings from just five companies’ restrictive policies in 2021 alone. It is estimated that annual losses of 340B savings are now in the billions of dollars.
  • One in three critical access hospitals have been forced to cut services due to 340B pricing restrictions
  • Two in three hospitals with impacted discounted drug assistance programs report patient harm, including delayed access to medications
  • 90% of hospitals expect to cut services if restrictions on 340B discounts persist

Examples of Harm to Patients

Watch our video stories demonstrating how drug company 340B cuts have harmed patients.

Drug Companies Design 340B Cuts to Maximize Their Profits

Drug companies’ cuts to 340B enable them to circumvent congressionally mandated inflation penalties for repeatedly raising their prices faster than the inflation rate. The cuts also enable drug companies to avoid offering high-dollar discounts on costly specialty drugs.

For 20 of the 21 drug companies cutting 340B discounts, at least half of the restricted drugs involve either specialty drugs or medications with a 340B discount of at least 85% due to inflation penalties.

How 340B Hospital Partnerships with Community and Specialty Pharmacies Benefit Patients

Diagram with arrows demonstrating how 340B hospitals send eligible patients to community-based pharmacies and the pharmacies provide additional 340B savings to hospitals. Graphic showing the types of services funded with 340B savings

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.