340B Drug Pricing Program

340B Savings, Revenue and Use

What is 340B?

340B is a program that allows a qualified health entity to purchase drugs from manufacturers at a discount for use by the entity’s patients. Strict rules apply to the program to ensure that only eligible patients are included, these discounts do not duplicate those of other programs, and that proper documentation is maintained. 340B savings are designed to extend the capacity of participating entities to provide necessary services. In rural areas, 340B is an important contributor to the viability of local hospitals and pharmacies.

How much does it benefit CMC?

In the 2022 fiscal year, CMC received direct savings of $358,470.54 on drugs administered to patients in the facility. Additionally, CMC has a 340B contract relationship with Kex Rx, the only retail pharmacy in the county. Via this contract, CMC received net revenues of $358,894.27, not including administrative and staffing costs.

What does CMC use this for?

Since CMC is reimbursed by Medicare at cost less 1%, and around 60% of our patients have Medicare, the majority of the savings noted above are passed on to the Medicare program as savings. In addition, when CMC first started the 340B program, we decided to demonstrate a good faith effort to keep drug prices low by cutting formula that determines our charges on all hospital-administered by 20-33%. This resulted in an annual reduction in medication charges of over $1 million in that year and every subsequent year. Lastly, we consider the impact of 340B savings as we add new medical practices, especially behavioral health, that our community needs, but that requires subsidy to be self-sustaining. 340B is part of making this feasible.