A healthy, productive workforce relies on access to medical services, including affordable prescription medications.
In 1992, the 340B drug discount program was established to lower costs for providers who mainly care for needy, economically disadvantaged, or uninsured patients. Under the law, pharmaceutical manufacturers discount prescription drugs to health care providers that receive federal grants or are non-profit hospitals that meet specific program standards. Congress envisioned that these providers would use the savings to help deliver discounted and vital drugs to underserved populations.
Unfortunately, the program has deviated from its original intent and is sorely lacking in accountability and transparency. Instead of helping lower-income, uninsured patients afford prescription drugs, we now see large health care manipulating the program for their own financial benefit.
While providers who receive federal grants, such as Ryan White HIV/AIDS, tuberculosis, and Title X family planning clinics, must use their revenue to help the vulnerable populations they serve. Large hospitals argue that they are not explicitly required under the 340B program to use the income they derive from the program to benefit low-income or vulnerable patients, and so they frequently don’t. A 2016 analysis of charity care provided by hospitals enrolled in the 340B drug discount program found that 340B hospitals have charity care rates below the 2.2% national average for all hospitals, and more than one-third (37%) of 340B hospitals provide charity care that represents less than 1% of their total patient costs.
And business is booming for hospitals using the 340B program as a revenue-generating line item. Between 2014 and 2016, the 340B drug discount program expanded 125%, and 340B hospitals are the major drivers behind this. Approximately 45% of all Medicare acute care hospitals nationwide are participants in the 340B drug discount program. In 2016, sales at the 340B price were estimated to be $16 billion, and research forecasts the program will exceed $20 billion by 2019 and $23 billion by 2021—all this growth despite an overall decrease in the number of uninsured patients and lower charity care burdens for hospitals.
The core mission of the 340B drug discount program is to help vulnerable people afford their prescriptions. The current trajectory of this program is unsustainable.
If we are going to ensure patients continue to receive access to the affordable prescriptions, Congress needs to act fast to fix the 340B drug discount program. Improvement to the 340B program center on transparency and accountability: participants in the program must be required to provide discounted medicines from the 340B program to vulnerable patients.
If Congress fails to act, patient costs and hospital profits will continue to swell. And our communities, state, and nation will all be left off with poorer health because of it – an option our workforce can’t afford.