The 340B Drug Pricing Program, created by Congress in 1992 through the Veterans Health Care Act, has provided discounted drug prices to hospitals and other health care organizations serving a wide population of low-income patients. Some 340B programs use contract pharmacies, an arrangement whereby the hospital or health care organization signs a contract directly with a pharmacy to provide covered pharmacy services at discounted prices.

The federal 340B Drug Pricing Program has provided access to reduced price prescription drugs to over 35,000 individual healthcare facilities and sites certified by the U.S. Department of Health and Human Services (HHS), and clinics have served more than 10 million people in all 50 states, plus commonwealths and U.S. territories. The 340B program has increased profits for hospitals through contract pharmacies because they have still received the same reimbursement but acquired drugs at a lower rate.