The 340B Drug Pricing Program was originally intended to help low-income and uninsured patients afford medicine. It was created to replace the discounts and free medicines that manufacturers provided to hospitals before the 1990s. However, since its inception, it has grown — with little transparency — from a targeted program for those in need into a cash grab for hospitals. Without enforced reporting requirements and a clear focus on directing savings to the intended beneficiaries, the 340B program will remain corporate welfare for wealthy hospital systems.
The most significant shift in the program came in 2010 when HRSA issued guidance allowing hospitals to contract with multiple pharmacies under the program. Previously, they were limited to just one. This change triggered a rapid expansion, and today nearly 60% of all pharmacies in America participate in the program.
Justin Leventhal is a senior policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.