The Centers for Medicare and Medicaid Services' proposed call to cut hospital outpatient reimbursement for the purchase of drugs under the 340B program is a non-issue for Walgreens Boots Alliance ( WBA) , which has a large exposure to 340B plans, investment firm Needham noted on Monday.
Created in 1992, the 340B plan is a federal government program that requires drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at significantly reduced prices.
Recently, the CMS proposed an over 22% drop for 340B drug payment program participants.
Despite the cut and Walgreen's significant presence in the program, Needham analyst Kevin Caliendo noted that 340B represented less than 1% of total U.S. pharmacy prescriptions for the company.
He reiterated his "Buy" rating on the stock with a $94 price target.
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