History Of 340B Program – How It All Started

History Of 340B Program – How It All Started

With 10.5% of the nation’s population are poor, the need for drugs at a reduced price was the right decision taken in the year 1990. 340B program started back then in the name of the Medicaid Rebate program. From then on, it was review and implementation of new plans, and everything was set and executed as a 340B program in the year 1992. No wonder, the program is helping many needy even now, and the 340B program has the nation’s history behind it. 

Where it all started?

The Congress in the year 1990 wanted to offer low-cost medicines to the poor. The Medicaid Rebate program allows the pharma companies to end up in an agreement to offer medicines at a discounted price. The rebate is then reimbursed by the state’s Medicaid agencies.

The agreement shall be signed between the pharmaceutical company and the Department of Health and Human Services. This agreement was under Part B of Medicare and Medicaid. 

The Concept of 340B program

The rebates were paid by the companies. However, the amount was calculated as the best price offered and not the discounted prices. That means to say, the prices were dramatically higher as well. The cost of medicines rose to 32% as against a normal increase of 9 to 10% in the previous years. 

This made congress rethink the intent and purpose and here we go, 340B emerged with a clear plan of action and criteria based segregation. 

Purpose of the program

The main cause for the program is to offer

  • The covered entities with low medication cost for any sicknesses that they undergo
  • To stretch federal resources and reach eligible patients to cure them of diseases by offering medicines at a discounted price.

The execution of the program is not as easy as we think. The third-party vendors sought support from OPA and started offering help to the covered institutions. 

One such company is MediraRX. They offer excellent help to the health care centers to track the data with utmost transparency. They offer 340b software solutions to organizations that are HIPAA compliant. 340B management solution offered by us is of greater use in 14 states. They have been in the industry for the past 10 years and have successfully set up health care organizations to execute and track their savings. 

Patients’ Eligibility Criteria

While the 340B program was set, the previous Medicaid rebate program error was comprehensively avoided. This happened by setting eligibility criteria for every entity that enters the program. 

Be it the health care center or the general public. An eligible patient who can get covered by the 340B program must be a low-income patient without any medicare system to pay for his expenses.


Further to the inclusion of eligibility criteria, the high-cost drugs are sold at the lowest price possible. Moreover, the treatments are given at the same covered institution. It is a rule in itself. Also, the over the counter drugs are provided to people but only in selected cases. The drugs shall be provided only if the prescription is FDA approved. 

About Haider Ali Khan

I'm an Independent Cyber Security Researcher, a geek who loves Cyber Security and Technology.