There has been broad acknowledgement in Congress and by the Administration, as well as by patient groups and some hospitals, that the 340B program is not working as Congress intended. Yet little has been done to correct the program abuses. And while we wait, the program continues to veer off path at an alarming rate.
The latest evidence of the 340B program not working as intended? (Fair warning – the numbers are startling.)
$24.3 billion. That’s the record number of 340B sales in 2018. As you may recall, the 2017 sales figure also hit a record – $19.3 billion – yet somehow the 2018 sales figure is 26% higher. As with years past, the Health Resources and Services Administration (HRSA) released these data showing the size of the 340B drug discount program to Drug Channels, who has been reporting these data since 2012. These data also show purchases under the program have grown on average 28% each year since 2017.
- $8.4 billion. That’s the decrease in uncompensated care provided by hospitals, as reported by the American Hospital Association, between 2013 and 2017. Many hospitals justify their large 340B purchases by saying it enables them to provide an increasing amount of charity care, but the data show that isn’t what is happening. In fact, as a percent of total hospital expenses, uncompensated care declined from 5.9% in 2013 to 4% in 2017.
340B disproportionate share hospitals (DSH) are purchasing more and more medicines at the 340B discounted rate – which averages 50% – and then turning around and billing insurers and patients at the full, undiscounted rate. This means 340B DSH hospitals are pocketing more and more money through the program while providing less and less charity care to the low-income, vulnerable patients that need it most. Making matters worse, the lack of reporting requirements for hospitals participating in 340B means we have no idea where all the money is going.
Year after year, we watch the total number of 340B sales grow. We also watch as charity care rates at many 340B hospitals decrease. Enough is enough. The 340B program was created to help safety-net hospitals and other entities provide care to needy patients. If they aren’t providing that care, then why should they benefit from the 340B program? No more watching. It is time Congress took action to right this wrong, fixing the 340B program so it helps patients as was intended when it was created.
Nicole Longo Nicole is director of public affairs at PhRMA focusing on Medicare, 340B, importation and more. She previously worked for a D.C.-based public affairs firm where she assisted a wide range of clients with communications efforts on everything from trade policy to agriculture policy to health care policy. Outside the office, Nicole can be found trying new restaurants (usually Italian), taking an occasional barre class and cheering on the Cincinnati Bengals.