CSAC Bulletin Article

Plan to Restrict 340B Drug Program Could Hit Public Hospitals

January 11, 2018

The Governor’s proposal to essentially discontinue the state’s administration of the federal Medicaid 340B Drug Pricing program could hit county public hospitals hard. The 340B program allows health entities, such as public hospitals, to purchase specific prescription medications in bulk and with special pricing.

The reimbursement process is handled by the Department of Health Care Services, which last year discovered irregularities in some of the contracting for 340B drugs and pricing. This resulted in the state owing several million dollars to the federal government.

In response, the Governor is proposing to end the program starting July 1, 2019. Twelve counties have public hospitals in the state, all of which participate and reap savings from the 340B program. CSAC will work with the California Association of Public Hospitals and Health Systems on this issue and to see if there’s a solution that would allow public hospitals to continue in the program. 

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