05 Sep Former Member of Congress educates on the value of 340B to Rural America
“Americans pay some of the world’s highest prices for pharmaceuticals. According to one study, it’s often two to six times more than the prices elsewhere. And drug-makers want to keep it that way. The companies blame high domestic prices on our federal regulations — which indeed need reform — but that’s not the real reason for the huge price difference.
Because of the drug-makers’ pricing policies, sick Americans subsidize cheap medicine for the rest of the world. The profits are massive — far more than the research and development budgets spent to develop new medicines. Forbes magazine in 2015 even declared pharmaceuticals as the No. 1 most-profitable industry in America, with net profit margins in the 25 percent to 30 percent range.
Yet while prescription drug-makers have no problem selling overseas at cut-rate prices, they want to kill a program that brings lower prices to rural America. Instead of having other nations pay their fair share, why do these big guys pick on the little guys, namely rural America and its struggling hospitals? Obviously, their sky-high profits still aren’t enough for them!
Big Pharma (as it is lovingly called) has unleashed a massive lobbying campaign to end a 20-year-old federal program that provides drug discounts for patients in distressed rural hospitals. It’s called the 340B program and it was created as a deal-clincher when the federal government expanded its purchases of prescription medicines. Now 43 percent of all retail drug prescriptions are paid with federal money (mostly through Medicare, Medicaid and the Veterans’ Administration), costing taxpayers around $190 billion each year.
The pharmaceutical companies, in turn, plow lots of that money back into lobbying, including their campaign to kill the rural hospital discount. Drug-makers not only are the most-profitable industry, but also the industry that spends the most on lobbying Washington. In the first half of this year alone, they spent $145 million, almost double the second-place industry. It’s not that the discounts are back-breakers — they involve barely 2 percent of total sales. The problem is that they are inconvenient to Big Pharma.
Rural hospitals see the need for affordable drug prices differently.
They face special problems, including disproportionate burdens of caring for veterans and senior citizens; they use the discounted drugs from the 340B program to serve their most vulnerable patients.”