340B was created to allow safety-net providers to buy outpatient medicines for less. They use the savings to stretch resources so they can provide a variety of services, drugs, and better care to patients who can’t always pay.

340B is not funded by taxpayers. Instead, drug companies sell drugs to providers at discounted prices, allowing them to stretch their existing funding even further. A government agency, the Office of Pharmacy Affairs, receives a small congressional appropriation to administer the program.

Both Republicans and Democrats have expanded 340B to cover those parts of the safety net people need most. For example, the most recent expansion added small rural hospitals with 25 or fewer beds that guarantee access to care in some of the most remote parts of our country.

340B discounts to all providers amounted to $6 billion or 1.3% of total U.S. drug sales in the U.S. in 2015. In contrast, drug companies spent four times as much on marketing and advertising their products.

For-profit hospitals are ineligible for 340B. Only public and nonprofit hospitals that serve large numbers of Medicaid and low-income Medicare patients or are located in rural areas qualify. Many of these providers operate at a loss.

Compared to non-340B acute care hospitals, 340B DSH hospitals provide more than twice as much care to Medicaid and low-income Medicare patients, provide a disproportionate amount of uncompensated care (60%), and are more likely to provide specialized health care services.

More than 27 million Americans remain without health coverage, according to the Kaiser Family Foundation. Millions more are underinsured and unable to pay for all their medicines and care. The need for the 340B program is stronger than ever.