The Well News: Rare Agreement in DC Shows Now Is the Time to Make a Fix

By Kasia Mulligan, Patients Come First’s National Spokesperson

At a recent Senate hearing, which refocused attention on the broken 340B Drug Pricing Program, lawmakers were reminded of how far the program has strayed from its original, humanitarian purpose.

A program intended to help vulnerable patients access affordable medications has instead metastasized into a massive system that overwhelmingly benefits hospitals and corporate entities at patients’ expense. 

In a rare show of unanimity, every witness at the hearing agreed: Congress must recognize the urgent need to reform the 340B Program, which is doing more harm than good.

The 340B Program was designed with a clear goal: to provide cost savings for low-income patients in underserved communities by requiring drug manufacturers to offer deep discounts. Eligible entities were meant to use those discounts to stretch scarce federal resources and pass on lower-cost prescriptions. That mission has not just gone by wayside — it has been hijacked.

Originally enacted in 1992, the 340B market has dramatically ballooned. This explosion in growth outpaced the growth in the actual population of low-income, uninsured patients. Rather than reallocating these enormous savings to lower patients’ out-of-pocket costs, many hospitals have found ways to pocket the profits, especially in wealthier areas, without increasing levels of uncompensated care.

Many people may not fully understand how 340B works: hospitals purchase essential drugs discounted between 25% and 50%, and then bill private insurers and Medicare at the full price, creating significant profit margins.

The profits are not funding patient care.

Instead they are channeled into financing unnecessary facility expansions, funding elaborate multimillion-dollar corporate headquarters, and offering generous executive bonuses, none of which lower medication costs for those who need it most.

As Sen. Bill Cassidy, R-La., remarked during the hearing, “340B should be about making drugs more affordable, not a line item on an investor call.” 

Crucially, a study by the Government Accountability Office also found no consistent correlation between an entity’s participation in the 340B Program and the amount of charity care it provides.

Our poll shows Americans are in agreement with those hearing witnesses, with an overwhelming 83% of respondents supporting reforms to the program to ensure that low-income patients are guaranteed to receive the cost savings it was designed to deliver. What’s more, a whopping 77% of respondents believe hospitals and health care providers should be required to pass along all discounts on prescription drugs, potentially lowering patients’ medication costs by as much as 50%.

Action taken within the last few months should give us hope that reform is near. In August, the Health Resources and Services Administration, the agency charged with overseeing the 340B Program, introduced a pilot initiative aimed at taking a first step to restoring the program’s original mission of lowering drug costs for patients. The proposed rebate model would improve transparency and prevent duplicate discounts to protect patients.

Read the full op-ed in the Well News here.