The 340B Drug Pricing Program is a critical federal initiative that allows
hospitals and other covered entities serving a significant portion of
low-income or uninsured patients to purchase outpatient drugs at discounted prices.
The program was designed to help safety-net providers stretch scarce resources
and reinvest savings into services that improve access to care for vulnerable
populations.
By participating in the 340B program, HRRMC can reduce drug costs, which
allows them to:
Expand Services: Offer a wider range of services to our patients.
Improve Access: Provide care to a greater number of patients, including
those who may be under- or un-insured.
Enhance Care: Improve the quality of care provided through access to more
affordable medications.
As a Critical Access Hospital, HRRMC qualifies for participation, which
directly supports our mission to serve rural and underserved populations.
Financial Benefits
Drug Cost Savings and Margin Improvement Through the 340B program, HRRMC purchases eligible outpatient medications
at discounts ranging from 12% to 75% or more below market rates. This
reduces the cost of goods sold for pharmacy operations and enhances overall
operating margin, particularly in high-cost drug categories like oncology,
neurology, and specialty infusions.
Contract Pharmacy Revenue HRRMC’s participation in the 340B program supports strategic partnerships
with local retail pharmacies via contract pharmacy arrangements. These
relationships generate additional program revenue through shared savings
models, which HRRMC reinvests into community health initiatives and offsetting
uncompensated care.
Stabilization of Rural Access to Care Savings from the 340B program directly support HRRMC’s ability to
maintain essential but often under-reimbursed services, such as behavioral
health, OB/GYN, and chronic disease management. Without 340B funds, these
services may operate at a financial loss or face contraction or curtailment—disproportionately
affecting low-income and rural patients.
Strategic and Community Impact
Supports Mission-Critical Services HRRMC uses 340B savings to fund mission-driven programs such as:
Charity Care programs
Rural health outreach and care coordination
Temporary housing for patients living over 40 miles from health care services
while seeking care
Pharmacy Infrastructure – supports staff, technology (e.g., sterile
compounding software), and training
Enhances Sustainability Amid Rural Challenges Rural hospitals face unique financial vulnerabilities, including low patient
volumes, payer mix challenges, and workforce shortages. The 340B program
serves as a vital revenue stream that contributes to HRRMC’s financial
resilience and long-term viability.
Reinforces HRRMC’s Role as a Community Anchor The 340B program enables HRRMC to reinvest in infrastructure, equipment,
and staff to better serve the local community. This includes maintaining
local access to specialty services and high-cost therapies that would
otherwise require travel to urban centers.
Conclusion
Participation in the 340B program is not only financially prudent—it
is essential for HRRMC to continue delivering comprehensive, equitable,
and sustainable care in our rural community. The program’s savings
are reinvested directly into patient care, workforce retention, and expanded
service availability, creating measurable and lasting health impacts for
those who need it most.
