Prescription drug prices in America continue to climb, but a federal program has quietly saved patients and healthcare organizations billions of dollars since 1992. A 340B pharmacy dispenses medications purchased at deeply discounted prices under the federal 340B Drug Pricing Program, passing those savings on to patients or reinvesting them in community health services. If you receive care at a qualifying facility, you may already be eligible for these lower prices without realizing it.
What Is a 340B Pharmacy?
A 340B pharmacy is either an in-house pharmacy operated by a covered entity (such as a hospital or community health center) or a contract pharmacy that has an agreement with a covered entity to dispense 340B-priced drugs. The “340B” designation comes from Section 340B of the Public Health Service Act, which requires drug manufacturers to sell outpatient medications at discounted prices to eligible healthcare organizations.
These discounts typically range from 25% to 50% off the wholesale price, though savings on certain drugs can exceed 80%. The Health Resources and Services Administration (HRSA) oversees the program and maintains a database of registered covered entities and their associated pharmacies at HRSA.gov.
How the 340B Program Works
Drug manufacturers that participate in Medicaid must also participate in 340B. They agree to sell covered outpatient drugs at or below the 340B ceiling price, which is calculated using a formula based on the Average Manufacturer Price minus the Medicaid rebate. HRSA publishes ceiling prices through its secure pricing system.
Covered entities purchase drugs at these reduced prices and dispense them to eligible patients. The entity may operate its own pharmacy or contract with retail pharmacies to fill prescriptions at 340B pricing. Revenue generated from the difference between the discounted purchase price and the reimbursement rate (from insurance or patient payments) is reinvested into patient care services, including sliding-fee-scale programs, charity care, and expanded clinical offerings.
Who Qualifies to Use a 340B Pharmacy?
You do not need to meet a separate income test to fill prescriptions at a 340B pharmacy. Eligibility depends on where you receive your healthcare. If you are a patient of a 340B-covered entity, meaning you have an established relationship with a qualifying hospital, community health center, or clinic, you may be eligible for 340B-priced prescriptions.
Covered entities include Federally Qualified Health Centers (FQHCs), Ryan White HIV/AIDS Program grantees, disproportionate share hospitals (DSH hospitals), children’s hospitals, critical access hospitals, and certain specialized clinics. Not every patient at a covered entity automatically receives 340B pricing. The entity determines its own policies about which patients benefit from the discounted drugs and how savings are distributed.
Finding a 340B Pharmacy Near You
HRSA maintains an online database called the Office of Pharmacy Affairs Information System (OPAIS) at HRSA.gov/opa. You can search for registered covered entities by state, city, or ZIP code. Each listing shows the entity’s contract pharmacies where 340B prescriptions can be filled.
Community health centers are among the most accessible 340B covered entities. There are over 1,400 FQHCs across the country, serving approximately 30 million patients. If you do not currently receive care at an FQHC, you can establish yourself as a patient. Most FQHCs offer sliding-fee-scale charges based on income, and their 340B pharmacies pass along drug discounts to patients regardless of insurance status.
Savings Examples
The savings at a 340B pharmacy can be dramatic. A brand-name statin that retails for $400 per month might be available for $80 to $150 through a 340B pharmacy. Insulin products that cost $300 to $600 at retail pharmacies can drop to $50 to $150. Specialty medications for conditions like HIV, hepatitis C, and cancer often see the largest discounts, with savings exceeding $1,000 per month.
These discounts apply to all covered outpatient drugs, not just generics. The 340B program is especially valuable for patients taking expensive brand-name or specialty medications that have no generic equivalent. If you are currently using prescription discount cards or GoodRx coupons, compare those prices with what a 340B pharmacy offers, as 340B pricing is often lower.
340B Pharmacy vs. Other Savings Programs
The 340B program differs from other prescription savings options in important ways. Unlike manufacturer patient assistance programs (such as those from Novo Nordisk or AbbVie), 340B does not require you to be uninsured. Patients with commercial insurance, Medicare, and even Medicaid can fill prescriptions at 340B pharmacies.
Compared to Medicare Extra Help, which is limited to Medicare Part D beneficiaries, 340B is available to anyone who is a patient of a covered entity. However, 340B and Extra Help can work together. A Medicare beneficiary who receives care at an FQHC can use Extra Help for Part D benefits while also accessing 340B pricing for medications not covered by their Part D plan. For a comprehensive view of savings strategies, see our healthcare costs guide.
Controversies and Limitations
The 340B program has faced criticism from pharmaceutical manufacturers and some policymakers who argue that not all savings are passed through to patients. A 2020 Government Accountability Office report found that some covered entities use 340B revenue primarily to fund operations rather than directly reducing patient costs. HRSA has responded by increasing oversight and auditing requirements.
Contract pharmacy arrangements have been particularly contentious. Some manufacturers have restricted 340B pricing at contract pharmacies, leading to lawsuits and regulatory disputes. These restrictions can limit your ability to fill 340B prescriptions at certain retail chains. Check with your covered entity about which pharmacies currently honor their 340B agreements.
Additionally, the 340B program does not cover inpatient drugs, vaccines purchased through certain federal programs, or drugs used in clinical trials. Only outpatient prescriptions dispensed by or on behalf of a covered entity qualify for 340B pricing.
Frequently Asked Questions
Do I need to be uninsured to use a 340B pharmacy?
No. Patients with private insurance, Medicare, Medicaid, and no insurance can all fill prescriptions at a 340B pharmacy. Your eligibility depends on having a patient relationship with a 340B-covered entity, not on your insurance status.
How do I know if my pharmacy participates in 340B?
Ask your healthcare provider or check the HRSA OPAIS database at HRSA.gov/opa. The database lists all registered covered entities and their contract pharmacies. Many community health centers also have on-site pharmacies that dispense 340B drugs directly.
Are all medications available at 340B prices?
The 340B program covers most FDA-approved outpatient drugs from participating manufacturers. However, not every drug at every pharmacy will be available at 340B pricing. Some manufacturers have restricted 340B sales at contract pharmacies. Your covered entity can confirm which medications are available at discounted prices.
Can I use a 340B pharmacy if I have Medicare Part D?
Yes, but the interaction between 340B and Part D is complex. Your Part D plan pays first, and the 340B discount applies to the covered entity’s acquisition cost. You may not see a direct out-of-pocket savings at the pharmacy counter, but the covered entity reinvests the 340B margin into patient services that benefit you.
Access 340B Savings Today
If you are struggling with prescription costs, a 340B pharmacy could be the solution you have overlooked. Start by visiting HRSA.gov/opa to find covered entities in your area. Establish care at a Federally Qualified Health Center or qualifying hospital, and ask about their pharmacy services. Combined with programs like Extra Help Medicare and prescription discount cards, 340B pharmacy access can dramatically reduce what you pay for medications.