The 340B program turns 30 years old today, November 4, a reminder that its lifespan has outlived its original intent—undermining the program as a whole.
How it started: When the program began in 1992, it covered safety net hospitals (including some teaching hospitals), their outpatient clinics, and community health centers, Bio.News explained. The program provided discounts of 25-50% on drugs to hospitals and clinics and their covered entities (contract pharmacies) to help them treat underserved populations.
How it changed: Today, the program has ballooned into “the second-largest federal prescription drug program, behind Medicare Part D,” STAT News reported. And sales from the program “amounted to $44 billion in 2021, a nearly 16% increase from the previous year,” STAT News reported earlier—up from $6.9 billion in 2012.
That growth belies a deeper issue: savings are not being passed on to patients as intended. For example, one study found that “of the over 1,000 340B hospitals, only 11% were reporting their data. What that showed, though, with that 11% is they’re marking up drugs 3.8 times.”
The biopharmaceutical industry is pushing back,we reported, with as many as 18 companies limiting distribution to contract pharmacies and BIO opposing state legislation that would allow the program to continue to balloon without lowering patients’ out-of-pocket costs.
The big picture: The unchecked expansion of 340B is setting up a system where hospitals and pharmacies make big profits and leave patients without discounts, while drug manufacturers and insurers foot the bill. The political posturing will only make biotech’s already risky market even more unstable, while oversimplifying highly complex methodical market manipulations on the part of a variety of actors.
Read More: Hospitals and pharmacies profit as 340B drives up patients’ drug costs
