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The 340B drug pricing program, which allows eligible healthcare providers known as covered entities to purchase medications at a reduced price, has been an incredibly valuable tool for providing affordable healthcare to underserved populations. However, the benefits of the 340B program go beyond just reducing the cost of medications. Covered entities that also act as pharmacy benefit managers (PBMs) for health plans in their community can leverage the program to create a circular healthcare economy that benefits not just the covered entity, but the entire community.
When a covered entity acts as a PBM for health plans in their community, they are able to negotiate lower prices for pharmaceutical products on behalf of their health plan clients. These lower prices can be passed on to patients, as health plans can offer lower out-of-pocket costs for prescription drugs. Moreover, by serving as a PBM, the covered entity is able to increase its
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