When President George H.W. Bush signed a bill into law creating the Section 340B Drug Pricing Program in 1992, it had broad bipartisan support. The goal of the program was clear: to help government-supported facilities serve America’s most vulnerable populations.
Hospitals and clinics that prioritized serving people with low incomes, the uninsured, and those living in rural areas would receive discounted prescription drugs from pharmaceutical companies, with the intention that those hospitals and clinics would reinvest the savings into patient care and community services.
However, 34 years later, the 340B program is far from what it was intended to be. Costs are skyrocketing, and there’s a massive deficit in transparency.
The way hospitals and clinics profit from the 340B program is simple: pharmaceutical companies are required to sell products at reduced rates, but these hospitals and clinics can still bill Medicaid, Medicare and private or marketplace plans at full price. The hospitals and clinics then pocket the difference.
