Time to put patients first

By Peter Pitts

The State of Missouri rests in the middle of the country and when it comes to the number of people living in poverty, the Show Me State is also in the middle, ranking the 19th worst state in the country for poverty.

Those struggling with income levels at or slightly above the federal poverty level struggle with with the cost of housing food and groceries, and, of course, healthcare.

For many, the choice between a prescription medication and the next meal is a decision they often find themselves having to make. Fortunately, there are programs available to these individuals better afford the life-saving medications they need.

One such program is the 340B Drug Pricing Program, which is a US federal government program created in 1992. The program requires drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at significantly reduced prices. The intent of the program is to allow these covered entities to "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."

However, poor oversight of the program since its creation 30 years ago has empowered hospitals and Pharmacy Benefit Managers (PBMs) to exploit charity care to pad their own profits by capturing the savings intended for needy patients. Under current law, providers are under no obligation to reserve the discounts of such drugs for needy patients or even report what they do with the savings they obtain through 340B. Eligible hospitals known as “covered entities” can obtain all 340B medications from a drugmaker at the discounted 340B price and then bill privately insured patients -- and even uninsured patients -- for the drug's full list price, helping themselves to the difference as pure profit.

As a result, the program has expanded well beyond its intended scope. In 2010, the Health Resources & Services Administration (HRSA), the agency that oversees the 340B program, opened the scope of the program to allow covered entities to contract with an unlimited number of third-party pharmacies to dispense 340B drugs. The number of contract pharmacies has skyrocketed from fewer than 1,300 locations in 2010 to nearly 28,000 in mid-2020.

The latest data show even greater growth in the 340B program. In 2021, total sales of 340B-discounted drugs were estimated to be $44 billion, a nearly 16% increase from 2020 and a 127% increase over the past five years. Hospitals accounted for 87% of the 340B purchases in 2020.

A new report demonstrates the abuse of the 340B program by hospitals and PBMs. The report finds that 72% of private nonprofit hospitals had a fair share deficit, meaning they spent less on charity care and community investment than they received in tax breaks.

The reality is patients are paying the price as they fail to realize the benefits of a program that they may not even know exists. Our lawmakers must protect patients from PBMs and large hospitals by returning the scope of the 340B program to its original intent.

The status quo as it relates to the 340B program is not acceptable. Missouri lawmakers at the state and federal must make absolutely certain the discount benefits get to the people who need it the most. Instead of lining allowing powerful companies to cash, it is imperative we honor the original intent of the 340B program and prioritize the people most in need of care.