Congress created the 340B Drug Discount Program in 1992 to reduce outpatient prescription drug costs for safety net health care providers, enabling them to stretch scarce resources as far as possible, reaching more eligible patients and providing more comprehensive services. The program was enacted with strong bipartisan support from Congress and signed into law by President George H. W. Bush. Over the years, under the leadership of both parties, Congress has expanded 340B eligibility to children’s, rural, and a small group of cancer hospitals.
Critics say Congress created 340B expressly to reduce drug costs for low income uninsured patients. They’re wrong.
340B’s purpose is to reduce outpatient drug costs for health care providers that serve high volumes of poor, uninsured, and underinsured patients so these providers can better serve them.
340B is not, and never was intended to be, a simple pass-through benefit to patients. If Congress and the President had wanted to create a federal prescription drug benefit for indigent uninsured patients in 1992, they could have.
Instead, Congress and the President created the 340B program to help safety net hospitals, community health centers, HIV/AIDS clinics, and others that provide much of the nation’s free and reduced-cost health care with some relief from prescription drug costs that were spiraling out of control. Providers use 340B savings to better serve their vulnerable patients.
If 340B didn’t exist, safety net health care facilities would offer fewer discounts on prescription drugs, serve fewer patients, reduce services, incur greater losses, and, in some cases, close their doors.