13 Oct JAMA Study: 340B Does Not Raise Drug Prices

By 340B Matters

The drug industry and its surrogates have contended for years that the 340B Drug Discount Program somehow raises drug prices overall.

It has argued that discounts provided under 340B to safety-net hospitals and clinics are offset by manufacturers when selling those same medicines at much higher prices on the retail market. It makes 340B a rather convenient scapegoat for a stunning 33 percent increase in American drug prices since 2014.

This specious argument is quoted chapter and verse by drug industry consultants and mouthpieces with regularity. “Yet many aren’t aware that a federal program is goosing the price of […] treatments and keeping prices high for patients who need these drugs,” wrote pharmaceutical business analyst Adam Fein recently in the Wall Street Journal.

Now the bogus reasoning has been definitively debunked in the prestigious Journal of the American Medical Association.

Researcher Sean Dickson of the West Health Policy Center conducted an elegant study indicating that drugs hit with inflation penalties under the 340B program (commonly known as penny pricing that forces manufacturers to sell a medicine for one cent) actually show restrained price growth more broadly.

Dickson analyzed 606 brand-name drugs that were used annually by more than 5,000 people through Medicare Part D between 2013 and 2017.

“No data were found to indicate that inflation penalties or discounts in the 340B program were associated with higher price increases, suggesting that mandatory inflation-based price concessions are not associated with higher list-price increases,” concludes Dickson.

Case closed for anyone interested in the truth. But don’t expect the drug industry and its multiple surrogates to stop making their ridiculous claims. This abnormally profitable sector won’t let peer-reviewed truth get in the way of avarice.

The rest of us now know better.

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