340B drug pricing program needs to return to its roots — serving vulnerable patients
High rates often means older Arizonans, particularly Hispanics, go without treatment
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Yanira Cruz
Submitted photo/InsideSources
Lawmakers created the 340B program to help the most vulnerable communities in the U.S. afford healthcare. For years now, the program has failed to deliver on that promise. With some simple reforms, Congress can change that.”
OPINION — No older adult should have to choose between filling a prescription and paying for groceries or keeping the lights on. Yet that’s precisely the choice too many older adults in the United States face, especially Hispanic adults.
More than one in five Medicare beneficiaries say they have recently delayed or skipped needed care because of cost. Hispanic older adults, in particular, go without treatment at disproportionately high rates.
More than three decades ago, Congress created a program to help these patients. The 340B Drug Pricing Program requires pharmaceutical manufacturers to provide steep discounts on medicines to certain hospitals, clinics and other safety-net providers. In theory, they can use those discounts to reinvest in the patient community they serve by offering services that don’t deliver much financial return, but provide enormous value to struggling communities.
Unfortunately, despite their good intentions, lawmakers never established tough guardrails or oversight mechanisms to ensure hospitals actually use the program to help people, rather than just padding their own bottom lines.
Right now, many hospitals buy discounted medicines and then resell them at significant markups to more affluent, insured patients. That means low-income patients aren’t getting the discounts Congress hoped for, and middle-class ones are facing inflated drug bills.
In short, a program intended to ease the healthcare affordability crisis is only making it worse. Congress needs to step in, strengthen transparency and accountability, and make sure 340B’s benefits actually reach vulnerable patients.
340B has grown far larger than lawmakers initially envisioned. At the outset, they expected the program would enroll about 200 hospitals. The program immediately grew beyond initial projections, and then kept booming. In 2010, hospitals and other “covered entities” bought $6.6 billion of medicines through the program. By 2021, that figure had grown to $43.9 billion. By 2025, purchases had surpassed $100 billion.
Patients largely haven’t benefited from those discounts, though. In fact, the program is actively hurting many vulnerable communities by incentivizing hospitals to partner with for-profit “contract pharmacies” in wealthier areas, so hospitals can route more prescriptions to patients with private insurance that will pay the steep markups hospitals demand.
A JAMA Health Forum study found that as 340B contract pharmacy arrangements expanded, the share of participating pharmacies in predominantly Hispanic or Latino neighborhoods declined. Growth concentrated in more affluent, predominantly White communities. If 340B is fulfilling its mission, one would expect program expansion to improve access in the underserved communities facing the greatest affordability challenges. Evidence that contract pharmacy growth is concentrated elsewhere raises concerns about whether 340B reaches those most in need.
That trend is troubling, especially given the financial pressures many Hispanic families face. In a survey by the Commonwealth Fund, more than half of Hispanic and Latino adults said that healthcare costs caused them to skip a prescription, recommended follow-up care, or a doctor’s visit when they were sick. Two in five who delayed or skipped care because of cost said their health worsened as a result.
Congress now has an opportunity to get 340B back on track. Recently, lawmakers from both parties have introduced proposals that would require hospitals to disclose how they use their 340B savings, and what portion directly supports patients. Accountability and transparency measures like these could reduce patients’ pharmacy bills and help ensure local pharmacies remain afloat amid competition from big national chains exploiting the 340B program.
Lawmakers created the 340B program to help the most vulnerable communities in the U.S. afford healthcare. For years now, the program has failed to deliver on that promise. With some simple reforms, Congress can change that.
Yanira Cruz is president and CEO of the National Hispanic Council on Aging. She wrote this for InsideSources.com. Please submit comments at yourvalley.net/letters or email them to azopinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.
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