Discounted Drugs for Needy Patients and Hospitals - Understanding the 340B Debate

On November 1, 2017, the Centers for Medicare and Medicaid Services (CMS) finalized its rule for reducing Medicare Part B payments to hospital outpatient departments for prescription drugs in the 340B Drug Pricing Program. Instead of reimbursing hospitals at the average sales price (ASP) plus 6%, CMS will now reimburse at ASP minus 22.5%, reducing spending by an estimated $1.6 billion in 2018. Though these planned cuts have been lauded by patient advocacy groups and the pharmaceutical industry as a way of limiting abuses of the 340B program and lowering out-ofpocket costs, they have not been well received by hospitals. The controversy surrounding the 340B program is as complicated as the program itself, and the new payment policy is the latest chapter in a drama that has played out over years. © 2018 Massachusetts Medical Society.