The 340B Drug Pricing Program was designed to help vulnerable patients access medications they might not be able to afford. But this program has strayed far from its original purpose. Large hospitals are using the 340B program to increase their profits — with little evidence patients are benefiting.
- Two-thirds of all U.S. hospitals. Roughly 3,000 hospitals in total participate in the 340B program.
- At face value, this could be considered a good thing for patients. But when 65% of these hospitals are not even located in medically underserved areas, it raises questions about whether the program is benefiting patients most in need.
- $100 billion. Total sales through the 340B program exceeded $100 billion and grew 12.2% year-over-year in 2022. 340B sales have almost doubled since 2018 and have outpaced the growth of the total U.S. medicine market.
- But there are zero policies in place to ensure hospitals use the profits they generate through the program to help patients.
- #2. 340B is the second largest federal prescription drug program, behind only Medicare Part D, exceeding Medicare Part B and Medicaid.
- Despite the dramatic size of the program, there is little oversight to make sure hospitals are complying with program requirements and little accountability when non-compliance is found.
- 500%. On average, hospitals mark up and charge 500% more for medicines.
- This doesn’t even consider the fact that medicines acquired by 340B hospitals are purchased at substantial discounts, making the average markup at 340B hospitals likely even higher.
The 340B program is a black box — with patients, the government and manufacturers left wondering where the tens of billions of dollars in manufacturer discounts go every year. Policymakers should seek improvements to the 340B program, like increasing transparency to ensure patients are the recipient of benefits, as intended. Policymakers should also find ways to reduce hospitals’ role in driving costs for patients and the broader health care system. Learn more.
