New data released by the Health Resources and Services Administration (HRSA) show that, last year, the 340B program saw record growth and marked another year of double digit expansion. Health care facilities participating in the program purchased a total of $66.3 billion in discounted prescription medicines – a 23% increase over 2022. This makes the 340B program the second-largest federal drug pricing program in the United States, second only to Medicare Part D.
To put it another way, 340B is now individually larger than the gross domestic products of the entire states of Vermont, Wyoming, and Alaska.
In keeping with past years, hospitals accounted for the vast majority of purchases under the program, approximately 87%, while Community Health Centers (CHC’s) represented just 5% of purchases. And unlike CHCs and other federal grantees, hospitals are not required to reinvest revenue from the program back into patient care or use it to lower healthcare costs for patients. In fact, they’re not required to disclose how they’re using this revenue at all.
According to a recent study, revenue from the 340B program exceeded charity care spending for 85% of participating hospitals and some hospitals use 340B revenue in ways that don’t benefit patients. For example, the University of Miami’s UHealth system, which participates in 340B, used revenue from their health system to help pay the salary of the University of Miami football coach.
Our partners represent patients, health care providers, manufacturers, and many 340B facilities and we are united in calling for common sense reforms to bring more accountability and transparency to the program and ensure low-income and underserved patients are directly benefiting from 340B savings. When providers are receiving $66 billion dollars in discounted medicines, it’s only fair that no low-income patient be asked to pay full price.
Our coalition supports clear, practical and achievable solutions such as:
Ensuring discounts go directly to patients, with a focus on low-income individuals.
New guardrails to prevent the program from being abused by middlemen like PBMs.
Improved transparency so the public can see how covered entities are using the revenue they generate from the program.
Policymakers, safety-net providers, and patient advocates urge Congress to prioritize policy changes that will bring integrity back to 340B and ensure billions in discounted medicines are used as Congress intended — to provide affordable medicines and health care for the most vulnerable of communities.