Medicare Price Negotiation Poses Challenges For Safety Net Providers

09 Feb 2024

• By Michael McCaughan

New drug pricing program under the Inflation Reduction Act could reduce the value of the 340B drug discount for safety net providers by as much as $1 billion in the first year, an analysis by the 340B Health association suggests.

pink pills down arrow — • Source: Shutterstock

The first wave of price cuts on the new US Medicare “negotiation” program could reduce the value of section 340B discounts for covered entities by as much as $1 billion per year, an analysis by the 340B Health coalition indicates.

Because 340B providers are able to buy deeply discounted drugs and bill Medicare and commercial payors at prevailing prices, any reduction in the spread between 340B pricing and reimbursement levels

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