WSJ calls out big hospitals. The Wall Street Journal Editorial Board is out with a new editorial that calls efforts to reform the 340B program “a good idea to cut drug costs,” pointing out that the program has “enriched large hospitals at the expense of patients.” As WSJ notes, “the 340B program is a classic example of a well-intended policy that has caused unintended harm.”
Here are a few excerpts from the Journal:
Growing out of control.
Originally the program helped around 50 safety-net hospitals, but now the program has ballooned— “some 2,700 hospitals now qualify for discounts, up from 45 in 1992. These include such well-off hospitals as the Cleveland Clinic, New York’s Northwell Health system, Beverly Hills’s Cedars-Sinai and New York Presbyterian.”
Driving up costs for everyone.
“Hospitals are allowed to buy outpatient drugs at steeply discounted rates, on average about 45% of a drug’s list price. Hospitals then charge insurers and Medicare a large mark-up on the drugs when their pharmacies administer them to patients, pocketing the difference.”
Preferring high-price medicines.
“Studies have found doctors employed by 340B hospitals are also more likely to prescribe higher-priced drugs. Why? Because the hospitals and their pharmacy partners reap bigger discounts on them than they do on generics. The result: Private insurers and Medicare spend more on drugs.”
Patients aren’t benefiting
“Hospitals are supposed to use the discounts for low-income patients, but a report this spring by Senate Republicans found little evidence they do… Some hospitals have signed deals with minor-league and college sports teams for naming rights to stadiums.”
The Bottom Line: As Congress and the Administration look for areas to cut fraud, waste and abuse in government spending and lower health care costs, they should focus their attention on the 340B hospital markup program that is costing the government and patients billions.
Read the full editorial and learn more at PhRMA.org/340B.
Molly Jenkins
Molly Jenkins is a senior director of Public Affairs at PhRMA, where she leads communications on the 340B hospital markup program. Before joining PhRMA, she led issue advocacy and reputation campaigns at Purple Strategies. She also worked on Capitol Hill in serval different capacities, including leading communications for Rep. Greg Walden and as press secretary for the Energy and Commerce Committee. Molly has an M.A. in Health Communication and Media Relations from Johns Hopkins University and a B.A. in journalism from Texas Christian University.
Molly Jenkins