Hospitals and pharmaceutical manufacturers are at odds over revisions to the 340B drug discount program, announced by the Biden administration last week.

The final rule, which will take effect on June 18 after a 60-day comment period, aims to make dispute resolution more accessible and efficient, according to the Health Resources and Services Administration, which oversees the program. Along with lowering barriers to entering the process, the rule requires parties to make a good-faith effort to resolve disputes before bringing them to arbiters and creates an appeals process if either party doesn't like the result.

The 340B drug discount program generates revenue for hospitals, clinics and pharmacies by requiring drugmakers to provide discounts on medications. The program was created more than 30 years ago to support hospitals caring for a disproportionate number of low-income populations by requiring drugmakers to give those providers discounts on outpatient drugs. These discounts can be as much as 20% to 50% off the list price. As a result, pharmaceutical companies strongly oppose the program for cutting into their bottom lines, while safety-net hospitals say 340B is a financial lifeline for their cash-strapped facilities.