The 340B Prescription Drug Program: Reforms Needed

In this episode of the Domestic Policy Podcast, Dr. Kent Kaiser explains what the federal 340B prescription drug program is, why it needs to be reformed, and what the Domestic Policy Caucus is doing through the organization’s Fix340B initiative. Under the program, the drug manufacturers provide front-end discounts on covered outpatient drugs purchased by specified providers that serve the nation’s most vulnerable patient populations. The problem began as for-profit hospitals started purchasing 340B those specified providers in order to gain access to 340B prices and as those hospitals began contracting with multiple pharmacies that also received the 340B discount. Many of those pharmacies or hospitals turn around and charge Medicare and Medicaid and private insurance companies the full price for a medicine acquired at the 340B discount. While the law was meant to help low-income people afford their medicines, the financial benefits of the 340B discounts are accruing almost entirely to hospitals, clinics, and physicians, and patients’ out-of-pocket costs and total cost of care are being increased. State-by-state 340B expansion has given more economic power to the already-monstrous, national chain pharmacies that have driven many local, mom-and-pop pharmacies out of business over the past several years.