The 340B drug pricing program helps improve the health of patients, communities

For three decades, the 340B drug pricing program has helped hospitals that serve large numbers of low-income patients offer and expand a range of important programs and services that improve health in 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 through drug company rebates — not directly from federal dollars — and it’s making a big difference for the most vulnerable communities across the country.

These rebates help hospitals provide their communities with a range of critical and customized benefits, many of which may not be possible without 340B. Examples of a 340B program expanding access to care include:

  • 340B helps Henry Ford Health in Michigan embed pharmacists in primary care and specialty clinics to treat chronic conditions and provide additional medical services to all patients, including the Medicines to Beds program, home delivery and courier services.
  • 340B helps Meadville Medical Center in Pennsylvania offer oncology services so rural cancer patients don’t have to travel long distances for treatment, as well as offer 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 like Street Medicine, which provides free emergency medical care to underserved or uninsured 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 their own story to tell about 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 340B hospitals provided nearly $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 for their patients and communities — big drug companies and their allies continue to attack the program because it eats into their profits . Many of these pharmaceutical companies are making record profits while 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 prices (set by pharmaceutical companies); Congress expands the number of hospitals eligible for the program in 2010, including in rural areas; and bureaucratic changes in reporting guidelines. Other factors include the increased popularity of ambulatory care (a trend seen throughout the health care field) as well as greater use of expensive specialty drugs.

Especially in this era of rising drug prices, 340B is at the heart of helping hospitals expand access to comprehensive health care services, including life-saving prescription drugs for those who need them but may not be able to 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).

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