340B drug pricing program helps advance health for patients, communities

For three decades, the 340B drug pricing program has helped hospitals that serve high numbers of low-income patients offer and expand a range of important programs and services that advance health within their communities.

The 340B program, which enjoys strong bipartisan support, requires drug companies to sell certain outpatient drugs to eligible hospitals at the same discount at which they sell to the government. It is funded through drug company discounts — not direct federal dollars —and it makes a big difference to the most vulnerable communities across the country.

These discounts help hospitals provide to their communities an array of critical and tailored benefits, many of which may not be possible to offer without 340B. Examples of the 340B program expanding access to care include:

• 340B helps Henry Ford Health in Michigan embed pharmacists in primary care and specialty clinics to treat chronic diseases and provide additional medication services for all patients, including the meds to beds program, home delivery and courier services.
• 340B helps Meadville Medical Center in Pennsylvania offer oncology services so cancer patients in rural areas do not need to travel long distances for treatment, as well as offering dental and behavioral health services at their rural health clinics. 
• 340B helps Mount Carmel Health System in Ohio go beyond the walls of its hospital to serve its community and patients through programs such as Street Medicine, which provides free urgent medical care to underinsured or uninsured community members.
• 340B helps Johns Hopkins Hospital in Maryland provide low-income patients with free and discounted outpatient drugs and other services, including telephone consultations, home visits and transportation services.

These are just a few examples. Each 340B hospital has its own story to tell about how the program is making a measurable difference in their community. In fact, in 2019, the most recent year for which this information is available, tax-exempt 340B hospitals provided nearly $68 billion in total benefits to their communities.
Although the program is working as Congress intended — to stretch scarce federal resources and help eligible hospitals provide more comprehensive care to their patients and communities — big drug companies and their allies continue to attack the program because it eats into their profits. Many of these drug companies are making record profits while drug prices skyrocket, putting even more pressure on patients and the providers who care for them.  

Factors that have contributed to the growth of the 340B program in recent years include the rising costs of drugs (set by drug companies); Congress expanding the number of hospitals eligible for the program in 2010, including in rural areas; and bureaucratic changes in reporting guidelines. Other factors include the increased popularity of outpatient care (a trend seen across the health care field), as well as higher use of expensive specialty drugs. 

Particularly in this era of rising drug prices, 340B has been core to helping hospitals expand access to comprehensive health services, including lifesaving prescription drugs for those who need them but may not be able to afford them. It is in everyone’s best interest to keep the 340B program strong so that our nation’s patients and communities can continue to receive the high-quality care and services on which they depend.

Rick Pollack is president and CEO of the American Hospital Association (AHA).