340B Drug Pricing Program

The 340B Drug Pricing Program is a U.S. federal government program created in 1992 that requires drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at significantly reduced prices. The intent of the program is to allow covered entities to "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services." Maintaining services and lowering medication costs for patients is consistent with the purpose of the program, which is named for the section authorizing it in the Public Health Service Act (PHSA). It was enacted by Congress as part of the Veteran's Health Care Act of 1992 and codified in Section 340B of the PHSA, signed into law by President George H. W. Bush.

As of 2023, covered entities' spending on 340B outpatient drug purchases exceeds $66 billion per year, with disproportionate share hospitals accounting for nearly $52 billion.