Inside 340B: Challenges, Controversies, and Opportunities

DarshanTalks Podcast

Darshan Kulkarni speaks with Thomas Siepka, CEO of HCI Healthcare Consultants, to take a deep dive into the often-misunderstood world of the 340B drug pricing program. Drawing on Siepka’s extensive experience as a pharmacist and healthcare leader, they explore how the 340B program was designed to support covered entities—such as disproportionate share hospitals and federally qualified health centers—by requiring manufacturers to provide steep discounts. These savings allow organizations serving large underinsured and uninsured populations to “stretch scarce federal resources” and reinvest in patient care and community programs.

The conversation unpacks the registration and qualification process, how HRSA and wholesalers determine eligibility, and what it means in practice for both hospitals and health centers. A major point of discussion is the growing reliance on contract pharmacies. While small community health centers may need one or two outside pharmacies to dispense medications, some large academic systems now contract with hundreds. Manufacturers see this as escalating their financial liability and potentially expanding the program beyond its original intent, whereas covered entities argue it is necessary to ensure broad patient access.

Another challenge Siepka highlights is the risk of duplicate discounts, where manufacturers may be required to give both a 340B discount and a rebate on the same prescription claim—an issue complicated by the sheer volume of transactions processed across the healthcare system. This tension reflects the program’s broader challenge: balancing patient care needs, provider sustainability, and manufacturer obligations.

As Siepka and Kulkarni note, the statute that created 340B is broad, leaving room for differing interpretations. Both manufacturers and covered entities agree on one thing: the need for greater regulatory clarity. With new rebate guidance tied to the Inflation Reduction Act and CMS’s role in drug price negotiations, the future of the 340B program will likely see even more scrutiny and debate.

This discussion sheds light on why the 340B program has lasted more than 30 years, why it continues to spark controversy, and what healthcare professionals should watch for as policies evolve.

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