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After months of controversy, the Department of Health and Human Services issued a stern rebuke to several large drug makers that have sought to curtail the discounts they offer through a federal program for safety-net hospitals and clinics.

At issue is the 340B drug discount program, which 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 low-income populations. There are approximately 12,400 so-called covered entities, including 2,500 hospitals, participating in the program.


Over the past several months, however, some drug companies began eliminating discounts, but for different reasons. In some cases, drug makers took this step if hospitals or clinics buy medicines and then ship them to retail and specialty pharmacies for patients to pick up or for delivery, instead of dispensing the drugs through their own in-house pharmacies.

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