The 340B Program and Pharmacy Liens: What PI Attorneys Should Understand

James Wong — Founder & CEO, LienScripts | March 4, 2026 | 7 min read

The 340B Drug Pricing Program allows certain healthcare entities to purchase medications at discounted prices, but it does not directly benefit personal injury plaintiffs. LienScripts pharmacy liens provide a separate, direct-access pathway for injury-related medications.

The 340B Drug Pricing Program is a federal program that requires drug manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to eligible healthcare organizations called covered entities. These covered entities include federally qualified health centers, disproportionate share hospitals, and certain other safety-net providers. For personal injury attorneys, understanding the 340B program is important because clients may receive some care at 340B-eligible facilities, and the interaction between 340B pricing and pharmacy liens raises questions that attorneys should be prepared to address. Pharmacy lien services through LienScripts operate independently of the 340B program, providing direct medication access without regard to facility eligibility or program restrictions.

• The 340B program provides discounted drug pricing to eligible safety-net healthcare organizations, not directly to patients
• Personal injury patients treated at 340B-eligible facilities may receive medications at 340B pricing, but this does not reduce the lien amount
• LienScripts pharmacy liens operate independently of the 340B program with no eligibility restrictions
• Attorneys should understand 340B basics to respond to defense challenges about medication pricing
• LienScripts generates a MERIT (Medication Evaluation & Rationale for Injury Treatment) report for every case, providing pharmacist-signed documentation for demand packages

What the 340B Program Is

Congress created the 340B program in 1992 to stretch federal resources and enable covered entities to reach more eligible patients. Drug manufacturers must offer 340B pricing to participate in Medicaid. Covered entities purchase medications at 340B prices and can dispense them to their patients, with the difference between the 340B price and the amount collected from patients or insurers generating revenue that supports the entity's mission.

The program has grown substantially. Over 50,000 pharmacy locations participate as contract pharmacies for 340B covered entities, and 340B purchases represent a significant portion of all outpatient drug spending. The program's growth has attracted scrutiny, reform proposals, and litigation, all of which are ongoing in 2026.

According to James Wong, PharmD, founder of LienScripts, "The 340B program serves an important public health purpose, but it is not a solution for personal injury medication access. A PI patient's eligibility for 340B pricing depends on where they receive care and whether that facility is a covered entity. The pharmacy lien provides universal access regardless of treatment location."

How 340B Intersects with Personal Injury

Treatment at 340B Facilities

Some personal injury patients receive treatment at hospitals or clinics that are 340B covered entities. When these facilities dispense medications to PI patients, the facility may have purchased those medications at 340B prices. However, the patient's bill typically reflects standard charges, not the 340B acquisition price.

Defense Challenges on Pricing

Defense counsel may attempt to argue that medications dispensed at 340B facilities should be valued at 340B prices rather than standard retail or lien pricing. This argument has limited legal support. The 340B discount is a benefit to the covered entity, not a price that the patient receives. The patient or their insurer is typically charged the same amount regardless of whether the facility is a 340B entity.

No Direct Patient Benefit

Unlike discount card programs or patient assistance programs, the 340B program does not directly reduce the price a patient pays at the pharmacy counter. The discount flows to the covered entity, which uses the margin to fund patient care programs. A personal injury plaintiff does not receive a lower medication bill simply because the dispensing pharmacy is a 340B contract pharmacy.

How Pharmacy Liens Differ from 340B

The LienScripts pharmacy lien is fundamentally different from the 340B program in structure and purpose:

No eligibility restrictions. Any personal injury patient can enroll in the LienScripts pharmacy lien program regardless of where they receive care, their insurance status, or their income level. The 340B program is limited to patients of covered entities.

Direct patient benefit. The pharmacy lien directly benefits the patient by eliminating upfront medication costs during the case. The 340B program benefits the covered entity, not the individual patient.

No facility dependence. The pharmacy lien works with LienScripts network pharmacies regardless of 340B status. The patient is not limited to 340B-eligible facilities or contract pharmacies.

Clear documentation. The MERIT report from LienScripts documents every dispensing under the lien with pharmacy identification, medication details, and dispensing dates. This documentation is purpose-built for litigation support, unlike 340B program records that are designed for federal compliance.

For attorneys managing medication access across multiple pharmacies, the pharmacy lien provides a unified documentation framework that 340B participation cannot replicate.

Responding to 340B-Related Defense Arguments

If defense counsel raises 340B pricing in an attempt to reduce the value of medication claims, attorneys should be prepared with the following responses:

The 340B discount belongs to the covered entity. The patient is not a party to the 340B pricing agreement between the manufacturer and the covered entity. The patient's damages are measured by the charges incurred, not by the entity's acquisition cost.

340B eligibility is facility-specific. Not all pharmacies or treatment facilities are 340B covered entities or contract pharmacies. The plaintiff may not have received medications from a 340B-eligible source at all.

Collateral source principles apply. In most jurisdictions, the collateral source rule prevents the defendant from benefiting from discounts or benefits available to the plaintiff from third-party sources. The 340B program is a federal benefit to covered entities, and its pricing should not reduce the defendant's liability.

For more on defending pharmacy lien amounts in litigation, the broader pricing defense framework applies to 340B challenges.

Practical Guidance

Attorneys do not need to become 340B experts, but understanding the basics helps respond to defense challenges and educate clients who may ask about medication pricing at safety-net facilities. The key message for clients is straightforward: the pharmacy lien through LienScripts provides guaranteed medication access at zero upfront cost, independent of 340B eligibility, insurance status, or treatment location. That simplicity is the core advantage of the pharmacy lien model for personal injury practice.