The great 340B debate: Point vs. counterpoint vs. finger points

From the right come calls for reform if not outright overhaul of the 340B Drug Pricing Program. The 34-year-old project is not only rife with fraud and waste, the argument goes, but also far afield from its original mission.

From the left and medical associations come vigorous voices insisting on letting 340B be, albeit with minor tweaks and fixes. The program is a critical lifeline for millions of patients, this side maintains, especially those of meager means. 

From hospitals and drug manufacturers come fingers pointed at one another.  

And from 340B watchers with neither a stake in the outcome nor a political ax to grind come generally good intentions to do the right thing according to their lights. 

And so it goes. 

With 340B under active congressional review—not least from competing bills in both the House and the Senate—Washington watchers expect the tug of war to continue throughout this summer and fall. 

The gist of the conflict is apparent in a side-by-side presentation of recent quotes from a handful of ready, willing and able commentators on the subject. 

Consider: 

‘Hospitals mark up discounted drugs with little restraint, contract pharmacies collect dispensing fees on top of that, and pharmacy benefit managers take their own cut for managing the data.’ 

It is not unusual for the hospital, the contract pharmacy and the PBM to belong to the same vertically integrated company, profiting from the same prescription at every step. Patients, meanwhile, are left with higher prices, fewer choices and a maze of a system to navigate—the opposite of what 340B was built to do.

—Former Trump Administration official Jack Kalavritinos, JD 

‘Medicare beneficiaries deserve a program that pays for the right care in the right setting at the right time.’ 

[CMS’s July 2] proposed rule focuses squarely on patient affordability by strengthening our utilization management tools, aligning drug payments with actual acquisition costs, and removing site-of-care disparities that have unnecessarily driven up costs for millions of seniors. We are committed to ensuring that Medicare resources are directed toward clinically appropriate, affordable high-value care for every patient we serve.

—CMS Administrator Mehmet Oz, MD, MBA 

 

‘If CMS is serious about eliminating fraud and waste, the 340B program—growing at more than 20% per year—demands immediate attention.’ 

If the federal government’s Health and Human Services and the states lack the capacity to oversee it effectively, then no one should interfere with manufacturers’ efforts to monitor claims and deny payment for fraud. Efforts to codify transparency and validation in law, such as those described in the 340B Drug Pricing Integrity and Affordability for Patients Act, create a framework for reducing illegal activity and getting needed help to patients.

—Kirsten Axelsen, senior policy advisor at DLA Piper law firm 

‘Without comprehensive legislative reform, 340B will remain plagued by abuse, opacity and uneven enforcement.’

At a minimum, Congress must impose basic transparency measures that are standard in other federal health programs, including claims-level reporting and clear documentation of how each provider spends its 340B revenue. Policymakers should also establish stricter standards and increase audits to verify that each 340B provider serves low‑income patients and meets a minimum charity care threshold before receiving discounted medicines. These commonsense accountability measures would bring 340B in line with the expectations that govern other large federal programs. They’d also help ensure that the program’s substantial financial benefits are directed toward the patients who need them most.

—Sally Pipes, president and CEO of the Pacific Research Institute (PRI), a California-based free-market think tank

‘There are many commonsense, bipartisan ways to reduce the cost of healthcare in the U.S., but cutting the 340B drug pricing program is not one of them.’

The program is essential to the welfare of patients and communities across the country. Eligible hospitals use 340B savings to provide free or low-cost drugs to patients in need, care for the uninsured and sustain critical service lines such as labor and delivery and behavioral health. These savings also support vital community health programs, including diabetes prevention, food banks, mobile mammography and opioid treatment. … Policymakers, patients and the public must keep the 340B program strong. 

—American Hospital President and CEO Rick Pollack 

‘No one’s checking how hospitals use 340B program profits.’ 

340B hospitals and clinics generate billions from exploiting the 340B program, and there are no guardrails on how they use program profits. Hospitals can spend on luxury perks like stadium naming rights, movies studios and Michelin-star chefs while engaging in aggressive debt collection practices. Hospitals get rich while patients, taxpayers and employers pay more.

—PhRMA (Pharmaceutical Research and Manufacturers of America)

‘After Republicans cut almost $1 trillion from our healthcare safety net, it’s more important than ever that we preserve and strengthen the remaining lifelines keeping our providers afloat.’

For more than 30 years, the 340B program has been a lifeline for our nation’s most vulnerable patients, providing free or discounted prescription drugs and important services at no cost to taxpayers. Unfortunately, Big Pharma is increasingly finding ways to undercut this mission and reduce patient access to lifesaving services. The 340B PATIENTS Act sets clear ground rules to prevent manufacturers from continuing these practices and strengthen the 340B program for years to come.

—Rep. Doris Matsui (D-CA)