Section 340b Case Study

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Section 340B of the Public Health Service Act is a drug pricing program enacted by Congress in the early 1990s. Prior to 340B, Congress created the Medicaid Rebate program in the Omnibus Reconciliation Act of 1990 due to the high costs that Medicaid was paying for outpatient drugs. The program calls for drug makers to create a rebate agreement with the Department of Health and Human Services (HHS) in a manner that is similar to the discounts manufacturers provide for large purchasers. If an arrangement is not reached with the HSS, the drug is ineligible for federal Medicaid coverage. [1] Two years after the implementation of this program Congress found that a flaw in calculating their “best price” for certain rebates. They did not take into account the pre-existing discounts that drug companies were giving to clinics and hospitals that provided services for uninsured patients. Failing to incorporate these discounts, the “best price” set by the government for certain drugs were in reality significantly higher than what these locations were previously paying. As a result, 340B was created and designed to protect these clinics and hospitals from these price increases as well as providing aid in the form of …show more content…

[2] And this is what I believe is most important about 340B. I got to witness firsthand how this program changes people lives. At my previous co-op, I worked at CVS Careplus which serves as the Health Safety Net pharmacy affiliated with Beth Israel. The majority of the patients are elderly and/or fall well below the poverty line but were unable to qualify for MassHealth standard. Many have chronic conditions such as hypertension or diabetes and would personally tell me that without the Health Safety Net program, tell me they would not be able to receive any medical care. So I am very interested to see how Beth Israel will work directly with a program like

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