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Congress must fix the 340B program

By Eric Hargis

An image of the exterior of the U.S. Capitol Building

In 1992, Congress passed a law to help low-income and uninsured patients get the comprehensive health care they need. The 340B program, named after a section in the Public Health Services Act, requires pharmaceutical companies to provide deep discounts to hospitals and clinics that serve a large number of financially vulnerable patients.

The concept of the 340B program is that these discounts would enable healthcare providers to reduce or eliminate out-of-pocket costs for low-income patients. However, the program lacks an accountability structure to ensure the discounts actually benefit patients. As a result, 340B has become a profit-making program for hospitals at the expense of poor patients. In fact, 85% of 340B hospitals earned more profit from the discounted drugs than they spent on charity care.

  • In 2022, 340B hospitals recorded $44 billion in profit that should have gone to help financially vulnerable patients. These hospitals spent $18 billion on charity care, only 42% of their profit.
  • Some hospital networks use their branches in low-income areas to receive discounts and then route these drugs to wealthier areas to be sold at full price.
  • Three reports from the Government Accountability Office (GAO) confirm that “340B entities fail to address racial, income, and geographic disparities.”

Last year, Senator Kennedy (R-La.) introduced the 340B Reporting and Accountability Act (S. 1182). This bill would require entities participating in the 340B program to provide outpatient drugs at a price that does not exceed the amount the provider paid.

S. 1182 would be a step toward ensuring that discounts provided by pharmaceutical companies in the 340B program help low-income patients. However, to date, the bill sits in committee and has no co-sponsors. Any legislation designed to fix 340B will face strong opposition from the powerful hospitals and clinics that made over $44 billion in the 340B program.

Congress must hear from the patient community if we are to fix 340B. The Colorectal Cancer Alliance is joining with coalitions of other patient advocacy groups demanding that Congress end the abuse of 340B and let the discounts help low-income patients, as Congress intended.


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