Rural Referral Center Participation in the 340B Drug Discount Program

This issue brief provides a detailed examination of Rural Referral Centers (RRCs) and their participation in the 340B Drug Discount Program. It outlines the significant growth in RRCs, which accounted for $1.3 billion in total purchases at 340B prices in 2022, marking a 405 percent increase since 2017. The brief clarifies that RRCs do not need to be located in rural areas, with 82 percent of currently enrolled RRCs situated in urban locations. It explains the eligibility criteria for RRCs compared to other hospital types, including Disproportionate Share Hospitals (DSHs) and Critical Access Hospitals (CAHs). The document discusses the implications of these criteria, particularly the lower eligibility threshold for RRCs, which allows urban hospitals to access 340B pricing despite not treating a sufficient number of low-income patients. Furthermore, it highlights the exclusion of orphan drugs from the 340B discounts for RRCs, which may impact their overall participation in the program.