Through the 340B or Disproportionate Share Hospital (DSH) Drug Pricing Program, certain federally funded grantees and other safety net health care providers may purchase prescription medication at significantly reduced prices. The 340B Drug Pricing Program resulted from enactment of Public Law 102-585, the Veterans Health Care Act of 1992, which is codified as Section 340B of the Public Health Service Act. Section 340B limits the cost of covered outpatient drugs to certain federal grantees, federally-qualified health center look-alikes and qualified disproportionate share hospitals. Significant savings on pharmaceuticals may be seen by those entities that participate in this program. You may be confused by the terms "PHS Pricing," "340B Pricing," and "602 Pricing." It is the same program and the same discount. You may also hear the terms "ceiling price" and "discount price." Here again, they are the same. Your hospital may qualify for this program if you meet certain criteria outlined below.You may click here to determine whether your hospital is eligible as a DSH. Upon completion of eligibility verification and enrolment with the DHHS Office of Pharmacy Affairs, you may sign up your hospital with a designated program such as the Prime Vendor Program in order to receive 340 B pricing. This program is free and voluntary to facilities that are already 340B eligible. Learn how to participate.

The ceiling medication prices available to 340B hospitals are significantly lower than GPO prices used by most hospitals, however; since this program is only for medications used in the outpatient setting, each individual hospital becomes responsible for keeping track of outpatient medication usage and ordering through the 340B program. This is a cumbersome process if performed manually. An alternative is for hospitals to purchase and implement a 340B Split-Billing Software offered by several vendors. Click here for a list of Split-Billing Vendors.

Getting Started

• Disproportionate Share Hospital Flow Chart (Acrobat/pdf) Find out if your hospital is eligible as a DSH
• Disproportionate Share Hospitals & Their Disproportionate Share Adjustment Percentage (Excel) The spreadsheet is provided to the Office of Pharmacy Affairs (OPA) by the Centers for Medicare and Medicaid Services (CMS) and is the official source used to verify a hospital’s DSH adjustment percentage. Hospitals appearing on the list with a DSH adjustment percentage of greater than 11.75% meet the adjustment percentage requirement to participate in the 340B program. However, there are other qualifying criteria that must also be met. For-profit hospitals are not eligible to participate in the 340B program. Hospitals not appearing on the list and hospitals that appear on the list but have a DSH adjustment percentage equal to or less than 11.75% are ineligible to participate in the 340B program.
• Formula used to calculate the DSH adjustment percentage
• Search Frequently Asked Questions by Category (Pharmacy: 340B Program) and by Sub category (Disproportionate Share Hospitals)
• Office of Pharmacy Affairs
  A component of the Health Resources and Services Administration Healthcare Systems Bureau, the Office of Pharmacy Affairs has three primary functions:
  • Administration of the 340B Drug Pricing Program, through which certain federally funded grantees and other safety net health care providers may purchase prescription medication at significantly reduced prices.
  • Development of innovative pharmacy services models and technical assistance.
  • Service as a federal resource about pharmacy.
  In all of its activities, OPA emphasizes the importance of comprehensive pharmacy services being an integral part of primary health care.  Comprehensive pharmacy services include patient access to affordable pharmaceuticals, application of "best practices" and efficient pharmacy management and the application of systems that improve patient outcomes through safe and effective medication use.
• Office of Pharmacy Affairs
  5600 Fishers Lane,
  Parklawn Building, Mail Stop 10C-03
  Rockville, MD 20857
  Office of Pharmacy Affairs (OPA) Website: http://www.hrsa.gov/opa/

Forms & Letters

• Private, Non-Profit Facilities
  • Letter to Enroll In 340B Drug Pricing Program for Private Non-Profit Hospitals (Acrobat/pdf)
  • Certification of a Contract between a Private Non-Profit Hospital and Local Government (Acrobat/pdf)
  • Certification Regarding Non-Participation in a Group Purchasing Organization (Acrobat/pdf) or Certification Regarding Non-Participation in a Group Purchasing Organization (Word/doc)
  • Inclusion of Outpatient DSH Facilities (Text File)
• Public Facilities
  • Letter to Enroll in 340B Drug Pricing Program for Hospitals Owned or Operated by State or Local Government (PDF)
  • Certification Regarding Non-Participation in a Group Purchasing Organization (Acrobat/pdf) or Certification Regarding Non-Participation in a Group Purchasing Organization (Word/doc)
  • Inclusion of Outpatient DSH Facilities (Text File)

Please click here for additional information on 340B http://www.hrsa.gov/opa/introduction.htm.