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A growing number of drug makers are taking steps to curtail the discounts they offer through a federal program for safety-net hospitals, the latest effort in a long-running battle by the pharmaceutical industry to limit payments to the controversial initiative.

At issue is the 340B drug discount program, which was created in 1992 and requires drug makers to offer discounts that are typically estimated to be 25% to 50% — but could be much higher — on all outpatient drugs to hospitals and clinics that serve indigent populations. There are approximately 12,400 so-called covered entities, including 2,500 hospitals, participating in the program.


Over the past several weeks, however, at least five big drug companies notified hospitals they may eliminate the discounts, but for different reasons. Some drug makers say the discounts will be cut if hospitals buy medicines and then ship them to retail and specialty pharmacies for patients to pick up or delivery, instead of dispensing the drugs through their own in-house pharmacies.

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