The 2005 Deficit Reduction Act added children’s hospitals to the list of covered entities entitled to participate in the Public Health Service Act Section 340B program discounts. In accordance with this statutory change, the Health Resources and Services Administration (“HRSA”) issued a Notice, dated July 9, 2007, the purpose of which is to propose guidelines regarding the addition of children’s hospitals to the 340B program. In addition, the HRSA Notice sets forth the obligations of the pharmaceutical manufacturers to provide the statutorily mandated discount to children’s hospitals. The Notice outlines the guidelines that hospitals must meet to qualify as a children’s hospital capable of receiving the benefit of the 340B discounts and also sets forth the requirements for children’s hospitals to receive retroactive discounts under the program. Children’s hospitals should review the Notice and proposed guidelines to assure that they can comply and take advantage of the 340B program, and also that they fully understand the obligations required in participating in the 340B program. Comments on the proposed guidelines should be submitted by September 7, 2007.