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H H S Department of Health and Human Services
Health Resources and Services Administration
Health Resources and Services Administration

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Program Requirements

Federal Register Notices | Policy Releases | Section 340B of the Public Health Service Act | Monthly Program Updates

Once a covered entity has registered and is approved to participate in the 340B Drug Pricing Program, it is the covered entity's responsibility to notify drug manufacturers and wholesalers that it will now purchase outpatient drugs at 340B prices. The wholesalers and manufacturers verify the covered entity’s enrollment on the 340B database and must sell its drugs at or below the maximum price determined under the 340B statute.

To purchase drugs at the 340B price, covered entities must:

  • Prevent duplicate discounts. 42 USC 256b(a)(5)(A)(i) prohibits duplicate discounts; that is, manufacturers are not required to provide a discounted 340B price and a Medicaid drug rebate for the same drug. Covered entities must accurately report how they bill Medicaid drugs on the Medicaid Exclusion File;
  • Prevent diversion to ineligible patients. Covered entities must not resell or otherwise transfer 340B drugs to ineligible patients;
  • Maintain auditable records documenting compliance with 340B Program requirements. Covered entities are subject to audit by manufacturers or the federal government. Any covered entity that fails to comply with 340B Program requirements may be liable to manufacturers for refunds of the discounts obtained;
  • Keep 340B database information accurate and up to date. Some change requests may be submitted online;
  • If applicable, register new outpatient facilities and contract pharmacies;
  • Recertify eligibility every year; and
  • Not participate in a group purchasing organization for covered outpatient drugs. (This requirement only applies to disproportionate share hospitals, free standing cancer hospitals, and children’s hospitals.)
Program Integrity

340B Drug Pricing Program covered entities must ensure program integrity and maintain accurate records documenting compliance with all 340B Program requirements.

Covered entities are subject to audit by manufacturers or the federal government. Failure to comply may make the 340B covered entity liable to manufacturers for refunds of discounts obtained.

Learn more: Program Integrity


340B Glossary of Terms (PDF - 299 KB)

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