A murky approach to tracking 340B drugs and Medicaid may yield double discounts in some states

Ed Silverman

Amid ongoing controversy over a federal drug discount program for safety-net hospitals, a new survey finds a dozen state Medicaid programs rely on an arguably inadequate method to avoid receiving duplicate rebates, which could provide a boost for taxpayers but hurt the pharmaceutical industry’s bottom line.

At issue is the interplay between Medicaid and the so-called 340B program, which was created in 1992 and requires drug makers to offer discounts of up to 50% on all outpatient drugs — for everything from AIDS to diabetes — to hospitals and clinics that serve indigent populations. There are approximately 12,400 so-called covered entities participating in the program, according to the U.S. Human Resources and Services Administration.

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