340B Drug Pricing Policy Leadership
The 340B Drug Pricing Program is a vital federal program that enables community health centers to purchase outpatient prescription drugs at discounted prices. Established by Congress in 1992, the program was designed to help providers “stretch scarce federal resources” to reach more patients and deliver more comprehensive services.
For health centers, 340B is foundational—not supplemental—allowing savings to be reinvested directly into patient care, expanding access, improving outcomes, and addressing social drivers of health.
Without 340B, the current reach and impact of the Health Center Program would not be possible.
340B Impact
5.8%
Percentage of total 340B savings accounted for by community health centers
77%
Percentage of large CHCs utilizing these savings to specifically provide services for rural healthcare to rural communities
1 in 4
Large CHCs use 340B savings for chronic disease prevention and management
$0
Aside from minimal oversight funding, 340B program discounts are not government-funded
Why 340B Matters
Community health centers serve patients regardless of insurance status or ability to pay, often in communities facing the greatest barriers to care. The 340B program provides a flexible funding stream that allows health centers to meet those needs in real time.
ACH member data shows that:
- 1 in 4 340B dollars supports care for rural patients
- Savings are reinvested directly into patient services, not retained as profit
- 340B helps health centers fill the gap between funding and the true cost of care, which is not fully covered by grants or reimbursement
This is exactly what Congress intended by creating a stable resource that allows safety-net providers to do more with limited funding.
How Health Centers Use 340B Savings
340B savings are reinvested into services that would otherwise be financially unsustainable. Across the country, health centers use 340B to:
- Keep clinics open, particularly in rural and underserved areas
- Expand telehealth and mobile care delivery
- Operate school-based and community-based clinics
- Provide transportation and enabling services that help patients access care
- Offer affordable or discounted medications for uninsured and underinsured patients
- Expand behavioral health, dental care, and specialty services
Because community health centers are governed by patient-majority boards, these investments are driven by community need and not profit motives.
340B Policy Challenges
Despite its proven value, the 340B program is under increasing pressure from policy and market forces that threaten its ability to support patient care.
- Manufacturer Restrictions: Drug manufacturers have imposed restrictions on contract pharmacies, limiting access to discounted medications and undermining the program’s reach, along with other policies designed to restrict progam benefits.
- Rebate Model Proposals: Proposals to shift 340B from an upfront discount to a rebate model would create cash-flow challenges, delays, and administrative burden, ultimately reducing patient access.
- PBM and Insurer Practices: Pharmacy benefit managers (PBMs) and insurers are engaging in discriminatory reimbursement practices that reduce or divert 340B savings away from patient care.
- Federal and State Policy Threats: Legislative and regulatory proposals risk adding complexity, restricting eligibility, or redirecting savings, weakening the program’s effectiveness.
These challenges come at a time when health centers are facing rising costs, workforce shortages, and increased demand for services making 340B more essential than ever.
The ACH 340B Policy Framework
ACH supports policies that protect and strengthen the 340B program while ensuring transparency and accountability.
Protect the Core Purpose of 340B
Ensure the program continues to function as intended—helping health centers stretch limited resources and expand access to care.
Preserve Access to Contract Pharmacies
Protect health centers’ ability to partner with pharmacies so patients can access medications in their communities.
Reject the Rebate Model
Oppose policies that replace upfront discounts with rebate systems that delay savings and shift financial risk onto health centers.
Prevent Discriminatory PBM and Insurer Practices
Stop practices that reduce reimbursement or divert 340B savings away from patient care.
Ensure Transparency Without Burden
Support transparency and accountability measures that do not restrict participation or reduce patient access.
Maintain Flexibility for Health Centers
Ensure health centers retain the ability to respond to local needs and reinvest savings directly into patient services.
ACH 340B Policy Impact
1. Shaping Federal Legislation to Protect Health Centers
ACH has played a direct role in influencing federal 340B legislation by ensuring proposals reflect how community health centers actually use the program.
- Helped support legislation like the Community Health Center Drug Pricing Protection Act (H.R. 7391) to exempt health centers from harmful rebate models
- Consistently engaged with the Senate Bipartisan 340B Working Group “Gang of Six” to help shape comprehensive SUSTAIN 340B Act reform legislation.
- Supported the 340B PATIENTS Act (H.R. 7635) to reinforce manufacturer obligations and protect access to discounted drugs
- Successfully elevated concerns about harmful provisions in broader bills like the 340B ACCESS Act, influencing the policy debate and preventing damaging changes
Impact: Health center priorities are now reflected in active legislative proposals—not just reactive advocacy.
3. Centering Patient Impact in the Policy Debate
ACH has successfully reframed 340B discussions around patients and communities.
- Elevated data showing 340B savings are reinvested directly into care and support services like telehealth, transportation, and rural health care
- Highlighted that 1 in 4 340B dollars supports rural patients
Impact: Policymakers increasingly view 340B as a care delivery tool, not just a pricing program
5. Elevating the Role of Contract Pharmacies
ACH has helped solidify recognition—on Capitol Hill and among policymakers—that contract pharmacies are essential to patient access.
- Consistently advocated that contract pharmacies are critical for reaching patients in their communities
- Ensured this principle is reflected in legislative discussions and reform frameworks
Impact: Contract pharmacy access is now a central issue in 340B policy, not just a side conversation.
2. Pausing Momentum Toward a Rebate Model
One of ACH’s most significant advocacy achievements has been pushing back against proposals to convert 340B into a rebate system.
- Led opposition highlighting risks like cash flow strain, delayed savings, and reduced patient access
- Organized a multi-stakeholder letter with 260+ organizations opposing the rebate model
Impact: The rebate model is now widely recognized as harmful to health centers and remains highly contested rather than adopted.
4. Creating the “340C” Reform Framework
ACH introduced a proactive policy framework for reform.
- Developed “340C”, a health center-informed model balancing:
- Access
- Accountability
- Sustainability
Impact: Shifted the conversation from “protect vs. change” to “how to improve 340B without harming patients.”
6. Building Broad-Based Advocacy Coalitions
ACH has strengthened its influence by bringing together diverse stakeholders.
- Led and participated in multi-organization advocacy efforts
- Hosted 340B learning collaboratives for its members to build best practices
- Engaged directly with bipartisan congressional working groups on 340B reform
Impact: The importance of 340B for health centers is more coordinated and harder to dismiss.
About ACH
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