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340B Drug Pricing Program

Scripps Mercy Hospitals participate in reduced drug pricing program

Scripps Mercy Hospitals participate in reduced drug pricing program

Scripps Mercy Hospital in San Diego and Chula Vista participate in the 340B Drug Pricing Program. Designated as a disproportionate share hospital (DSH), Scripps Mercy is eligible to purchase outpatient drugs at a reduced price, allowing it to stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.


The 340B Drug Pricing Program is a vital lifeline for safety-net providers — such as those at Scripps Mercy Hospital — who provides critical health services in our communities. The program is narrowly tailored to reach only hospitals that provide a high level of services to low-income individuals or that serve isolated rural communities. Savings from the 340B program help hospitals meet the healthcare needs of underserved patients across the country.

How 340B supports Scripps Mercy Hospital and our community

Scripps Mercy Hospital contributed $125,582,139 to community benefits for Fiscal Year 2021, including:


  • $11,212,193 in charity care
  • $46,859,173 in Medi-Cal and other means-tested government programs
  • $43,589,561 in Medicare shortfall
  • $1,459,856 in bad debt 
  • $2,183,502 in subsidized health services


We use our 340B savings to keep our costs down so we can keep our doors open. Scripps Mercy is designated a DSH hospital, providing care to a large number of patients who either lack health insurance or are covered through a government subsidy program. Our payer mix is:


• 27.9% Medicare

• 25.5% Medi-Cal

• 11.7% commercially insured patients

• 22.6% of patients have another payment source, including self-pay, CMS, or charity care


One way Scripps Mercy is able to provide care to some of our most needy patients is through in-lieu of funds. In-lieu of funds are used for unfunded or underfunded patients and their post-discharge needs. Funds are used for board and care, skilled nursing facilities, long-term acute care and home health. In addition, funds are also used for medications, equipment and transportation services. $1,981,058 was spent on in-lieu of funds in FY2021.

About Scripps Mercy Hospitals

• 655 licensed beds

• 4,297 employees

• San Diego’s longest established and only Catholic medical center

• Provides health care services for 23.6% of the inpatient population living within the hospital’s central service area

• 36.53% DSH hospital