The 340B Drug Pricing Program was created with a narrow and defensible purpose: to allow safety-net healthcare providers to buy medicines at steep discounts to better serve low-income and uninsured patients. Instead, a series of regulatory decisions and structural loopholes has transformed the program into a revenue stream for large hospital systems. What began as targeted relief for vulnerable communities now operates as a pricing strategy — one that often bypasses the patients the program was meant to help.
The strategy is straightforward. Hospitals buy drugs at a 25 percent to 50 percent discount through 340B, bill insurers at full price, and keep the difference. This is a far cry from the program’s original intent of supporting low-income and uninsured patients.
In North Carolina, 340B hospitals charged the North Carolina State Health Plan for Teachers and State Employees more than five times what the hospital paid for drugs, pocketing more than $13,000 each time the prescription was filled.
Justin Leventhal is a senior policy analyst for the American Consumer Institute, a nonprofit education and research organization that advocates for consumers through evidence-based analysis and data. Follow Justin on X @JustinLeventhal.