For three decades, the 340B drug pricing program has helped hospitals serving large numbers of low-income patients provide and expand a variety of important programs and services that advance health within their communities.
The 340B program, which enjoys strong bipartisan support, requires drug companies to sell certain outpatient drugs to eligible hospitals at the same discount they sell to the government. It’s funded by drug company rebates — not direct federal dollars — and makes a big difference for the most vulnerable communities across the country.
These deductions help hospitals provide their communities with a number of critical and tailored benefits, many of which may not be possible to provide without 340B. Examples of the 340B program that expand access to care include:
- 340B helps Henry Ford Health in Michigan engage pharmacists in primary care and specialty clinics to treat chronic conditions and provide additional medication services to all patients, including an inpatient medication program, home delivery and courier services.
- 340B helps Meadville Medical Center in Pennsylvania provide oncology services so that cancer patients in rural areas do not have to travel long distances for treatment, as well as provide dental and behavioral health services at their rural health clinics.
- 340B helps Mount Carmel Health System in Ohio reach beyond the walls of its hospital to serve its community and patients through programs such as Medicine Street, which provides free emergency medical care to uninsured or underinsured community members .
- 340B helps Johns Hopkins Hospital in Maryland provide low-income patients with free and discounted outpatient drugs and other services, including telephone consultations, home visits and transportation services.
These are just a few examples. Each 340B hospital has its own story to show how the program is making a measurable difference in their community. In fact, in 2019, the most recent year for which this information is available, tax-exempt 340 B hospitals provided approximately $68 billion in total benefits to their communities.
Although the program is working as Congress intended—to stretch scarce federal resources and help eligible hospitals provide more comprehensive care to patients and their communities—big drug companies and their allies continue to attack the program because it feeds on their profits. Many of these drug companies are making record profits as drug prices skyrocket, putting even more pressure on patients and the providers who care for them.
Factors that have contributed to the growth of the 340B program in recent years include rising drug costs (imposed by drug companies); Congress expands the number of hospitals eligible for the program in 2010, including rural areas; and bureaucratic changes in reporting guidelines. Other factors include the increasing popularity of ambulatory care (a trend seen throughout the health care field), as well as the higher use of expensive specialty drugs.
Especially in this era of rising drug prices, 340B has been essential in helping hospitals expand access to comprehensive health services, including lifesaving prescription drugs for those who need them but may not be able to afford them. ‘afford them. It is in everyone’s best interest to keep the 340B program strong so that our nation’s patients and communities can continue to receive the high-quality care and services they depend on.
Rick Pollack is president and CEO of the American Hospital Association (AHA).
