To purchase drugs at the 340B price, covered entities must meet the following ongoing requirements:
Recertify eligibility every year.
Prevent duplicate discounts. Manufacturers are prohibited from providing 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, as mandated by 42 USC 256b(a)(5)(A)(i).
Prevent diversion to ineligible patients. Covered entities must not resell or otherwise transfer 340B drugs to ineligible patients.
Prepare for program audits. 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.
Disproportionate Share Hospitals, freestanding cancer hospitals and children's hospital must also refrain from participating in a group purchasing organization for covered outpatient drugs.
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.
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)