Don’t Fall for This Big Pharma Lie

By 340B Matters

The drug industry has an army of public relations suits busy spinning the world as Big Pharma sees it. Don’t be a patsy for one of its biggest and most repeated lies: The 340B Drug Discount Program was originally intended as a direct patient benefit.

Congress created 340B in 1992 to help safety-net hospitals and clinics get a break on outpatient drug pricing so they could “stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” It was then and is now a safety-net provider support program.

In order to be eligible for 340B discounts, a hospital must be publicly owned or a private non-profit organization that treats about 30 percent Medicaid in-patients, at the very least.

Many 340B hospitals have much higher Medicaid and charity-care patient loads – like Parkland Memorial Hospital in Dallas, Texas, with 61 percent. This fact is important because Medicaid often reimburses hospitals below the cost of providing care. In effect, these providers lose money on every Medicaid patient.

Moreover, the percentage of charity care – care which providers don’t get ANY reimbursement for – is typically on par with, or even higher than, the percentage of Medicaid patient load at 340B hospitals and clinics.

Congress designed the 340B program to help safety-net providers cover the cost of treating patients who are uninsured or underinsured. Hospitals and clinics use the savings to help fund such services as Emergency Rooms, cancer and diabetes clinics and medication counseling. Many also provide no-cost and low-cost medications to patients in need.

Big Pharma wants you to believe that hospitals are abusing the 340B program by redirecting a patient benefit for their own financial gain.

That’s pure malarky. 

340B has always been a safety-net healthcare provider-based program. It helps hospitals and clinics deliver robust care to low-income Americans every day.