How a 340B Direct Savings Plan Works for Hospitals

The 340B drug pricing program is designed to give hospitals the flexibility to use their savings toward the types of patient care and support that their communities need the most. How does that work for hospitals that decide to use their access to 340B to provide the discounts directly to patients who cannot afford their drugs? Paul Orth, 340B program manager at University Health Kansas City Truman Medical Center, sits down with us to discuss how his health system’s direct drug savings program is helping both uninsured and underinsured patients.

How the program works

Orth says his system’s direct savings program is built into the system that prescribes medication electronically from its clinics and its hospitals’ electronic medical records system. When the prescriptions that generate from those visits are sent to a system pharmacy, 340B eligibility codes are attached that allows the pharmacy to know that they are eligible to receive the drugs at the 340B-discounted price plus a dispensing fee.

Underinsured patients also benefit

Orth says University Health describes its direct savings model as an uninsured program because that describes the key patient population that benefits from receiving the 340B price. But that assistance also is available for underinsured patients who otherwise would be expected to pay more in prescription drug copays than the 340B price. 

Drugmaker restrictions are a barrier

Orth says this program is the difference between patients receiving a needed medication and going without one, which prevents hospital readmissions and emergency department visits. But he also notes that drug company restrictions limiting 340B pricing to a single contract pharmacy are negatively affecting the program, ultimately adding another barrier for access to care. 

Resources:

1. 340B Health Urges HRSA To Block J&J Plan To Replace 340B Discounts With Rebates
2. J&J Implements 340B Rebate Model Despite HRSA Opposition
3. 340B Health Equity Report 2023