STAT+: Trump administration proposes pilot initiative to address controversy over 340B drug discount program

Ed Silverman, a senior writer and Pharmalot columnist at STAT, has been covering the pharmaceutical industry for nearly three decades. He is also the author of the morning Pharmalittle newsletter and the afternoon Pharmalot newsletter . The Trump administration is proposing a voluntary program in which pharmaceutical companies can offer rebates for a small number of therapies to hospitals that participate in a federal drug discount program, an effort to sort out a controversy that has roiled the health care industry. At issue is the 340B discount program, which was created to help hospitals and clinics care for low-income and rural patients. Drug companies that want to take part in Medicare or Medicaid must offer their medicines at a discount — typically, 25% to 50%, but sometimes higher — to participating hospitals and clinics. Right now, drug companies generally provide the discounts at the time of purchase. Advertisement Since its inception more than three decades ago, the program has ballooned — there are now about 55,000 participating entities — and has regularly factored into the clash in the U.S. over drug prices. Prescription medicines purchased under the program amounted to $66.3 billion in 2023, a 23.4% increase from the previous year, according to federal government data.