Lower prices on medicines and increased access to charity care for needy citizens. Who wouldn’t want that?
The federal 340B program is meant to provide such benefits.
Here’s how the 340B program works: Hospitals and pharmacies are allowed to buy prescription drugs at deep discounts from the pharmaceutical manufacturers, as mandated by the law. They are reimbursed by insurance plans — including Medicare and Medicaid — at the full price of the drugs. The resulting windfall of “profit” is supposed to help patients afford their prescription medications. Some of the money is supposed to be used to provide charity care in areas where people are the most in need.
Unfortunately, a loophole in the law allows hospital systems and pharmacy chains to keep for themselves the financial benefits that are meant for patients.
According to the Journal of the American Medical Association, the financial benefits of the 340B program are accruing largely to hospital systems and clinics. Indeed, the profit has become a significant revenue source for some, with little to no benefit for patients.
This takes place without the patient being aware of it. Indeed, many might be categorized by their hospital or pharmacy as 340B patients and never be told they are 340B patients. As such, the hospital or pharmacy can reap the financial windfall meant to help the patients afford their medications. The patients don’t know they are entitled to help with their out-of-pocket copay or coinsurance, let alone whether they are contributing to charity care or how much they are contributing.
At Our Health Equity, our interest in the 340B issue is focused on charity care for patients.
Fresh results from a survey in Colorado that we commissioned through Keating Research with questions related to the 340B program should provide a clarion call to policymakers.
The survey results show how Americans feel about issues related to the 340B program. Specifically, 84 percent of Coloradans support a law requiring hospitals and clinics to use the discounts they receive from pharmaceutical manufacturers to reduce the cost that patients pay for their prescriptions. In comparison, a measly 7 percent oppose it. These numbers are vaguely representative of how American voters feel about the issues.
There is support across political divides. In the Keating survey, support was strongest among Democrats (88 percent) and politically unaffiliated voters (86 percent), with a robust 78 percent of Republicans also supporting it.
Clearly, policymakers should heed the survey results.
Why? When voters were asked if they would be more likely or less likely to support a lawmaker who voted to dedicate 340B program funds to reduce the out-of-pocket costs and prices that patients pay for prescription medicines, 78 percent said they would be more likely to do so. Latinos (82 percent) and African-Americans (87 percent) indicated higher support levels.
There is a lot of chatter around the 340B program as Congress and legislatures discuss revisions and reform, with the hospital systems and big chain pharmacies trying to create uncertainty about what the program does and how it operates. They are incentivized to make the 340B program sound complex, but the issues are simple.
When the noise clears, voters expect the 340B program to live up to its promise to provide lower drug prices and meaningful charity care — in other words, to prioritize patients over profits. This begins with transparency and accountability.
