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The Korea-US Free Trade Agreement Threatens Federal "340B" Discounts for Medicines for Low Income Americans

Chapter Five of the pending Korea-US Free Trade Agreement (Korus FTA) creates a set of binding rules for "central level" government programs that set reimbursement rates for pharmaceuticals and medical devices. Through the federal "340B" program, federal legislation and the federal Department of Health and Human Services establishes discounted reimbursement rates for pharmaceuticals and medical devices supplied to programs that serve low income Americans. Unlike the federal Medicaid program, which provides mandatory discounts to state health care programs, the 340B program is not explicitly exempted from coverage from the Korea FTA's pharmaceutical chapter.  As described below, the Korea FTA appears to mandate statutory changes in the operation of the 340B program, which in turn may raise the costs of administering 340B.

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