Your Complete Guide to the 340B Program for Drug Pricing
Simplifying & Understanding
the 340B Pharmacy Program.
What Is the 340B Program?
The 340B Drug Pricing Program is a federal program created by Congress in 1992 that allows certain healthcare organizations — called covered entities — to purchase outpatient prescription drugs at significantly discounted prices, typically 20–50% below wholesale cost.
The program’s purpose is straightforward: help safety-net hospitals, clinics, and federally qualified health centers stretch limited resources so they can serve more low-income and underserved patients.
For independent pharmacies, 340B represents one of the most important revenue opportunities available today — by becoming a 340B contract pharmacy, you can dispense medications for covered entities in your community and earn dispensing fees while serving patients who need you most.
This site is your free, plain-English resource for everything 340B. No legal jargon. No confusing government language. Just clear, practical guidance for pharmacists and pharmacy owners.
How the 340B Program Works
Step 1 — Covered Entities Buy Drugs at a Discount
Eligible healthcare organizations — known as covered entities — are required by law to receive discounted drug pricing from pharmaceutical manufacturers. These discounts can be 20–50% or more below the standard wholesale price.
Step 2 — They Bill Insurance at the Normal Rate
The covered entity dispenses those discounted drugs to patients and bills insurance (Medicare, Medicaid, commercial plans) at the normal non-discounted rate. The difference between what they paid and what they billed is their 340B “spread” — and it’s used to fund patient care services.
Step 3 — Contract Pharmacies Dispense on Their Behalf
Rather than operating their own pharmacy, most covered entities partner with external pharmacies — called contract pharmacies — to dispense 340B drugs to their patients. If your pharmacy becomes a contract pharmacy, you dispense the medications and earn a dispensing fee for each prescription filled.
Step 4 — Everyone Wins with Affordability
The covered entity extends its reach. The patient gets affordable medications. Your independent pharmacy earns dispensing fees and builds patient volume. That’s why nearly two-thirds of all U.S. pharmacies now participate in the 340B program.
Who Can Participate in the 340B Program?
Covered Entities (Organizations That Receive Discounts)
Not every healthcare organization qualifies. To be a covered entity, an organization must be one of the following:
- Federally Qualified Health Centers (FQHCs)
- Disproportionate Share Hospitals (DSH) — hospitals serving a high share of low-income patients
- Children’s hospitals and cancer hospitals
- Rural referral centers and sole community hospitals
- Critical access hospitals
- Ryan White HIV/AIDS clinics
- Black lung clinics and urban Indian organizations
Any licensed pharmacy in the United States can apply to become a 340B contract pharmacy for a covered entity in their area. There are currently more than 31,500 contract pharmacies participating in the program — and the opportunity for independent pharmacies to join is wide open.
340B By the Numbers — 2026
Total value of drugs purchased through 340B in 2024, up 23% from the prior year.
Total covered entities registered in the 340B program.
Total unique pharmacy/covered entity relationships in 2026.
Typical discount covered entities receive on drug purchases.
Why 340B Is a Game-Changer for Independent Pharmacies
Independent pharmacies are under more pressure than ever — competing against large chains, shrinking reimbursement rates, and rising operating costs. The 340B program gives independent pharmacies a powerful way to fight back.
Increase Patient Volume
Covered entities direct their patients to their network of contract pharmacies. Joining the 340B network brings new patients to your pharmacy — patients who tend to be loyal and have ongoing medication needs.
Earn Dispensing Fees
As a 340B contract pharmacy, you earn a negotiated dispensing fee for every 340B prescription you fill. These fees add up quickly and represent a meaningful new revenue stream outside your standard reimbursements.
Differentiate Your Pharmacy
Offering 340B contract pharmacy services positions your independent pharmacy as a community healthcare partner, not just a dispensing location. This matters for patient loyalty and for competing against the big chains.
Serve Your Community’s Most Vulnerable Patients
340B patients are typically low-income, managing chronic conditions, and taking multiple medications. These are the patients who benefit most from the care and personal attention an independent pharmacy provides.
Are Your 340B Patients Taking Multiple Medications?
340B patients are often managing complex, multi-medication regimens for chronic conditions like diabetes, heart disease, HIV, and mental health disorders. Keeping track of multiple medications, doses, and times is one of the biggest challenges these patients face — and missed or incorrect doses can lead to hospitalizations and serious health complications.
Pharmacy-grade blister cards are the solution.
The same sealed blister cards used by pharmacists worldwide are now available for your pharmacy and your patients’ caregivers to fill at home. Each individual dose is sealed behind a foil backing — torn foil means the dose was taken, sealed foil means it wasn’t. No guessing. No confusion. No accidental double doses.
Studies show blister card packaging improves medication adherence from 61% to 96%.
For independent pharmacies serving 340B patients, offering medication compliance packaging is a powerful way to improve patient outcomes, reduce hospitalizations, and demonstrate the kind of comprehensive care that only an independent pharmacy provides.
340B Compliance in 2026 — What You Need to Know
The 340B program is under more regulatory scrutiny than ever. HRSA audits are increasing, manufacturer restrictions on contract pharmacy shipments are tightening, and the legal landscape is shifting state by state.
The most common compliance mistakes that get pharmacies flagged or removed from the program:
- Incorrect OPAIS records — accounted for 62% of all audit findings in 2024
- Duplicate discounts — dispensing 340B drugs to Medicaid patients without a carve-in arrangement
- Patient eligibility errors — failing to verify that patients meet the covered entity’s patient definition
- Inadequate record-keeping — not maintaining purchase, dispensing, and patient eligibility records as required
The good news: staying compliant is straightforward if you have the right systems and checklists in place
Is Your State Protecting 340B Contract Pharmacies?
As of 2026, 21 states have enacted laws prohibiting pharmaceutical manufacturers from restricting 340B pricing access at contract pharmacies. If you’re an independent pharmacist, knowing whether your state protects your 340B contract pharmacy arrangements could be the difference between a thriving 340B program and losing access entirely.
Free 340B Resources for Independent Pharmacists
Everything on this site is free. No paywalls, no subscriptions, no hidden fees. We’re a small business that supplies medication packaging to pharmacies across the United States, and we built this resource because we believe independent pharmacies deserve the same quality information as the big chains.
340B News & Regulatory Monthly Updates
340B News & Regulatory Updates — August 2026
The Most Important 340B Developments of August 2026, Summarized in Plain English Published by 340bprogram.com | August 31, 2026Sources: HRSA Federal Register, Holland & Knight,
340B News & Regulatory Updates — July 2026
The Most Important 340B Developments of July 2026 Published by 340bprogram.com | July 31, 2026Sources: HRSA Federal Register, CMS, AHA, Covington & Burling, ArentFox Schiff,
340B News & Regulatory Updates — June 2026
The Most Important 340B Developments of June 2026 Published by 340bprogram.com | June 30, 2026Sources: Senate HELP Committee, Washington State Hospital Association, Alston & Bird,
340B News & Regulatory Updates — May 2026
The Most Important 340B Developments of May 2026 Published by 340bprogram.com | May 31, 2026Sources: Becker’s Hospital Review, HFMA, 340B Report, BioPharma Dive, ACI Monthly
340B News & Regulatory Updates — April 2026
The Most Important 340B Developments of April 2026 Published by 340bprogram.com | April 30, 2026Sources: ACI Monthly 340B Update April 2026, NACHC, Kodiak Solutions, 340B
About This Site
340bprogram.com is published by Medication Packaging Solutions, a US-based supplier of pharmacy-grade blister cards for independent pharmacies, caregivers, and seniors. We’ve spent over 8 years working with pharmacies and supplying pharmacies with the packaging tools they use every day. I’ve Spent Over 20 Years Inside the Pharmacy Packaging Industry. Here’s What I Learned About 340B.
We built this resource because we kept hearing from independent pharmacists who were confused, overwhelmed, or simply unaware of the 340B opportunity in their communities. This site is our way of giving back to the independent pharmacy community that has supported us for over a decade.
All information on this site is provided for educational purposes. For specific legal or compliance advice regarding your 340B program, consult a qualified 340B consultant or healthcare attorney.
Questions? Contact us at steve@340bprogram.com or visit MedicationPackagingSolutions.com