04 Mar Big Pharma Robs $6B from America’s Healthcare First Responders
By 340B Matters
Big Pharma has stolen $6 billion from safety-net hospitals and clinics during the past two years. The effect has been huge, leading to service cutbacks to low-income patients amid a roiling pandemic.
Fourteen gigantic drug companies have shamelessly robbed the 340B Drug Discount Program. Created in 1992 by a bipartisan Congress and signed into law by President George H.W. Bush, the program requires manufacturers to supply discounted medicine to nonprofit healthcare providers that serve high numbers of poor patients. In return, the industry was allowed to sell into the phenomenally lucrative Medicaid and Medicare markets. But starting in 2020, drug makers stopped providing discounts to hospitals and clinics that contract with nearby pharmacies to fill prescriptions.
The result has been a cascading windfall of ill-gotten gains. The drug companies are illegally overcharging the healthcare providers while still milking Medicaid and Medicare. Just how much money is made there? Let’s look at Eli Lilly, the original ringleader of the 340B heist. Since 2020, the company has enjoyed $10 billion in sales to the two government programs. In that same timeframe, Lilly posted overall net earnings of $11.7 billion. Novo Nordisk, another miscreant, grabbed $12 billion in Medicaid/Medicare sales on the way to posting net earnings of $13.9 billion.
It should be noted that drug manufacturers make a profit on selling to 340B providers even at discounted prices, they just don’t like to talk about it.
Meanwhile, healthcare first responders on the front lines of the COVID pandemic are paying more for medicines and being forced to trim much-needed community health services. In many cases, discounted or free medicines are no longer available to patients in need. One area that’s particularly hard hit is diabetes drugs. Eli Lilly, Novo Nordisk, and Sanofi hold more than 90 percent of the insulin market – and they’re among the 14 companies that have hijacked the 340B program.
Last year, Community Healthcare System in St. Mary’s, Kansas shut down its emergency room and trimmed its bed count due, in part, to higher expenses incurred because of Big Pharma’s rampant overcharging on 340B medications. Other safety-net providers are cutting back on staffing to stanch the red-ink caused by the drug industry pilfering.
The damage done to America’s health infrastructure is real.
This thievery must stop.
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