CMS changes payment policy for drugs purchased through 340B

Drug Pricing Lab
November 3, 2017

In a move to reduce the out-of-pocket burden for Medicare patients, CMS announced that reimbursement for drugs purchased through the 340B discount program would be changed from ASP+6% to ASP-22.5% in 2018. According to Seema Verma, the CMS Administrator, “Medicare beneficiaries would benefit from the discounts hospitals receive under the 340B Program by saving an estimated $320 million on copayments for these drugs in 2018 alone.”

The 340B program provides drug discounts to qualifying hospitals. In recent years, the program has fallen under scrutiny for its effects on drug prices, physician prescribing patterns, and health care disparities. Our work on this topic includes an examination of the cost consequences of the program, as well as its potential to generate profits for hospitals that expand into more affluent communities.