A 24-hour hospital pharmacy. Photo via Wikimedia Commons

With the expansion of coverage of healthcare in 2010 through the Affordable Care Act, much changed in our efforts to insure the uninsured. 

Today, as the health care system struggles under the weight of the COVID-19 pandemic, it is even more critical to ensure healthcare dollars are directed where they are needed most. Many federal programs have been evaluated and modernized to ensure their efficacy. 

But one federal program that has not yet been reviewed by Congress is the 340B prescription drug program. Initially created to help Medicaid (known as Medi-Cal in California) stretch resources to serve vulnerable patients, the program has since morphed into a profit maker for large corporations — all while patients are struggling to access affordable care.    

When the program was created by Congress in 1992, 340B required pharmaceutical companies to offer prescription medications to Medicaid at the lowest possible price available. The idea was that the savings realized on medications under 340B would be directed toward expanded access to care for uninsured patients.

Then in 2010, 340B was extended to include hospitals and health clinics that treat low-income and vulnerable communities so they too could use those savings to help more patients. Though it did provide needed help to facilities that used the program correctly, it also opened loopholes for bad actors to increase the profits of some of the nation’s largest and wealthiest corporations.

A recent study by the Berkeley Research Group outlines this misuse. First, because of a low threshold for proof that the program is ultimately benefiting the underserved, large pharmacy chains are able to contract with 340B, allowing participation in the program to grow more than 4,000% between April 2010 and April 2020. This explosive growth, along with the program’s lack of transparency and accountability, make it difficult to determine whether the program is actually working to expand patient care as intended.

BRG reports that much of the 340B profit results from participating companies obtaining bulk prescription drugs at the lowest cost, but in turn billing insurers for the full cost of the medications. This has done nothing to lower prescription costs for patients, and the lack of accountability within 340B leaves everyone to guess whether prescription discounts are helping patients in need.

This program is no different than others and Congress must act to review it and make needed changes to ensure its compliance with the original intent. The current situation is completely contrary to the specific goals of 340B and the ultimate goal of healthcare reform — which is to increase patient access to care and lower out-of-pocket costs.

By instituting broad accountability and transparency in 340B, we’ll be able to better understand whether participating entities are actually directing their savings on prescription medications toward patient care for the underserved. We must protect the well-intended 340B program for those using it responsibly, and stop the billions of dollars flowing to those who simply use the program for profit.

After all, 340B was created to help patients. Let’s make sure every dollar is doing that.

Scott Suckow is the chairperson of the California Chronic Care Coalition of San Diego County.

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