New Study Increases Scrutiny on the 340B Program

A recent study conducted by the National Pharmaceutical Council examined the shortcomings of the 340B system, highlighting how geography, facilities, and market power affect the windfalls collected by 340B hospitals.

The 340B program, introduced to provide comprehensive care to underserved patients, has expanded exponentially in the last 20 years, with the number of enrolled participants growing from 591 in 2005 to 2600 in 2023. This growth did not expand services to underserved patients but instead lined the pockets of large hospital systems. In 2022, the average drug discount provided to 340B covered entities was 57%, but these discounts are rarely passed onto the patients who need this care the most. Instead, hospitals use these discounts to fund facilities in affluent neighborhoods, driving out competitors and leaving high need communities behind.

Lawsuits across the country illustrate the exploitative power of the 340B program. Particularly, the case in West Virginia, which is ranked 49th in the nation for median household income. Charity care is vital in impoverished communities, but charity care only accounts for 1.32% of expenses in West Virigina, 0.83% below the national average of 2.15%. These hospitals should be prioritizing comprehensive care for underserved communities, instead they rack up profits and drive out competition. Read more here.