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“For 25 years, the 340B Drug Pricing Program has made a difference in the lives of millions of Americans. The relatively-unknown program, started in 1992, reduces the cost of drugs for many “safety-net” hospitals and providers who serve low-income, underinsured, or uninsured patients.
It was simple: Drug manufacturers discounted outpatient drugs for these entities in return for a guaranteed share of the lucrative Medicaid market. These discounts — perhaps as much as 20 percent to 50 percent off drug prices, according to the Government Accountability Office — allowed hospitals to stretch all-too-scarce resources, treat more patients, and provide better service.
And yet, this summer the Centers for Medicare and Medicaid (CMS) announced proposed changes for the 340B program that would drastically reduce hospital savings on these drugs. At a time when drug costs are rising at a faster rate than wages and when some drug treatments can cost thousands — or tens of thousands of dollars — per month, such proposed changes would be unfair to millions of American patients who rely on such treatments, especially in rural and underserved areas. Here, diabetes, obesity, and opioid overdoses occur at a higher rate than urban areas, but ability to afford treatment is lower. The 340B program is a lifeline to help patients get the medications they might not be able to afford otherwise.
Changes to the 340B program might therefore cause vulnerable patients to lose access to necessary drugs. Many hospitals would be forced to dramatically reduce services to those who need this assistance. It might even force hospitals to close altogether. This is terrifying to contemplate, as 122 rural hospitals have already closed since 2005, and almost 700 more are currently at risk. As it is, 41 percent of Illinois hospitals already operate on slim or negative margins.”