It’s worth remembering that Congress created the 340B program more than 20 years ago to require highly profitable drug manufacturers to provide safety-net hospitals and clinics with discounted pricing on outpatient medications. In turn, the hospitals and clinics pass on a price break to low-income patients and other vulnerable populations.
Congress also intended for these healthcare providers to buy medicine at a discount, bill insurance companies for it at market rates, and then use the savings to improve and expand primary care and more complex and expensive treatment for cancer, AIDS, diabetes, and other diseases and conditions. The program is critical to health care providers serving a high-volume of care to low-income, uninsured and undersinsured patients.
Critics complain that the program is too big and that providers in the program are “profiting” from 340B. But in truth, 340B helps keep these safety net institutions running and enables patients to get care in their communities. Take for instance, the small town of Greensburg, IN. Recently, the local Decatur County Memorial Hospital had to lay off 10 percent of its workforce. Administrators are now looking to 340B savings to help keep the doors open and ensure that their patients can continue to get the hiqh-quality health care they deserve.
Similar critical-access hospitals as well larger urban and community hospitals are facing steep cutbacks under the Affordable Care Act, making the 340B program crucial to maintaining healthcare services in their communities.
Read our op-ed here.