Hundreds of hospitals, federally qualified health centers (FQHC) and other qualified providers in California and across the U.S. could soon save on their drug costs through a product developed by Keenan that assists with implementing or enhancing the 340B federal drug discount program.
Originally passed in 1992 as part of the Veterans Health Care Act, the 340B program provides deep discounts on outpatient medications to covered entities. Earlier this year, the Affordable Care Act (part of the federal Health Care Reform legislation) expanded the program, allowing more facilities throughout the nation to participate in the 340B program.
Currently, most hospitals, through group purchasing organizations, are able to purchase drugs at about a 15 to 20 percent discount. The expansion of 340B will raise that discount to an average of 51 percent. Depending on the size of the hospital or center, this could mean significant annual savings.
Broadening of the program means that such facilities as specialty hospitals (free standing cancer hospitals, for example), rural hospitals, and a range of smaller facilities (health centers for the homeless, for example) are now eligible to participate. Since Health Care reform was enacted, President Obama has recently expanded coverage for orphan drugs (expensive drugs to treat rare diseases) to children’s hospitals. This 340B program enhancement will provide additional millions of dollars in cost savings to children’s hospitals across the U.S.
Source: Keenan Healthcare
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