Congress created the 340B Drug Pricing Program to help vulnerable patients access medicines at safety net facilities. Under the program, manufacturers are required to provide steep, mandatory discounts on outpatient medicines to certain safety net clinics and qualifying hospitals. Nearly three decades after the program was created, the program no longer resembles its original mission, with little to no evidence patients are always benefiting. Today, large hospital systems, for-profit pharmacies and other middlemen have co-opted a program meant to help patients and turned it into one that boosts their bottom lines.
of all hospitals in the United States participate in the 340B program
of hospitals that receive 340B discounts have charity care rates below the national average of 2.7% for all hospitals
in estimated gross profits was generated by 340B covered entities and their contract pharmacies on 340B retail medicines in 2018 alone
The 340B program, which is solely funded by the biopharmaceutical industry, is now the second largest federal prescription drug program, behind only Medicare Part D. The current 340B program attracts entities and for-profit pharmacies because lax program rules enable them to manipulate the program to benefit their bottom lines, often to the detriment of patients. Alarmingly, an analysis in the New England Journal of Medicine concluded that, “financial gains for [340B] hospitals have not been associated with clear evidence of expanded care or lower mortality among low-income patients.”
Biopharmaceutical companies are advocating for meaningful improvements that can be made to ensure patients benefit more directly from the discounts provided by manufacturers and that covered entities are held accountable for how they use 340B discounts. These improvements include: