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

For three decades, the 340B drug pricing program has helped hospitals serving large numbers of low-income patients to provide and expand important programs and services that promote health in their communities.

The 340B program, which has 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 discounts help hospitals provide many critical and tailored benefits to their communities, many of which they would not be able to provide without 340B. Examples of 340B programs that expand access to care include:

• 340B helps to include pharmacists in primary care and specialty clinics to treat chronic diseases at Michigan Henry Ford Health and to provide additional medication services to all patients, the Medicines to Bedside program, home delivery and referral services.
• 340B helps Meadville Medical Center in Pennsylvania provide oncology services so rural cancer patients don’t have to travel long distances for treatment, and provides dental and behavioral health services at their rural health clinic.
• 340B helps Carmel Health System in Ohio go beyond the hospital walls to serve the community and patients, through programs like Street Medicine, which provides free urgent care to uninsured or underinsured community members.
• 340B helps Johns Hopkins Hospital in Maryland provide low-income patients with free and discounted outpatient and other services, including telephone consultations, home visits and transportation.

These are just a few examples. Each 340B hospital has its own story of 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-free 340B hospitals collectively provide nearly $68 billion in benefits to their communities..
Although the program is working as intended by Congress — to deploy fewer federal resources and help eligible hospitals provide more comprehensive care to their patients and communities — big drug companies and their allies continue to attack the program as a drain on their profits. Many of these drug companies are enjoying record profits, and as drug prices rise, they put 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 have been the increase in drug costs (set by drug companies). Congress expanded the number of hospitals eligible for the program, including in rural areas, in 2010; and bureaucratic changes in reporting guidelines. Other factors include the increasing popularity of outpatient care (a trend in the health care field) and the use of expensive specialty drugs.

Especially in this era of rising drug costs, 340B is key to helping hospitals expand access to comprehensive health services, including life-saving drugs for those who need them but can’t afford them. It is in everyone’s best interest to continue to strengthen the 340B program so that our nation’s patients and communities can receive the high-quality care and services they depend on.

Rick Pollack is president and CEO of the American Hospital Association (AHA).