Nov. 4, 2022— Today marks the 30th anniversary of the enactment of the 340B drug pricing program. With his signature on Nov. 4, 1992, President George H.W. Bush completed a bipartisan effort in Congress to protect the health care safety net and boost care for people living with low incomes.
The new program was unusual in that it did not ask the American taxpayers to provide the funding needed to protect safety-net hospitals, health centers, and clinics. Instead, it asked the pharmaceutical industry to provide those resources through discounts on outpatient drugs that qualified providers purchased. By lowering the prices these institutions paid for the drugs, 340B started generating savings that Congress said providers could invest “to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.”
In return for providing the discounts, drug companies received guaranteed access to the large and growing markets in the Medicaid and Medicare outpatient care programs. Over time, more than 700 drugmakers would come to agree to this mutually beneficial deal, and 340B would go on to become an integral part of the health care safety net for patients that it is today.
Congress set rigid standards for which providers could qualify for 340B discounts. For hospitals, the rule limited the discounts to public or private nonprofit hospitals. In addition, hospitals needed to document that their average caseload of low-income Medicaid and Medicare patients was substantially higher than other hospitals. 340B also started providing resources to a vital group of public health organizations, including federally qualified health centers, Ryan White HIV/AIDS clinics, clinics treating tuberculosis, hemophilia, black lung, sexually transmitted infections, and clinics serving Indigenous peoples.
A True Success Story
Looking back on three decades of 340B, it is evident the drug pricing program and the providers that participate are fulfilling Congress’s vision to keep the health care safety net strong by providing needed care to patients who are uninsured, underinsured, or reliant on public health programs. This has remained true even in the face of economic uncertainty and a historic pandemic. 340B also has helped invest in communities through a series of health and wellness programs tailored to the needs of the people who live there.
Thanks to 340B, providers can keep their promise of service to America’s disadvantaged. Patients can receive quality care that’s closer to their homes, jobs, and families. Communities can rely on access to the vital health services and delivery networks needed to sustain a robust social fabric. All this has been possible through a tax-neutral program that has continued to enjoy bipartisan support across five administrations and 15 Congresses, while serving the health care needs of thousands of communities and millions of Americans.
The Patient Faces of 340B
Statistics alone do not tell the whole 340B story. The real story is told by the patients and providers who have seen 340B at work:
Kathleen Cavanagh of Boise, Idaho, lives with a host of serious medical conditions, including type 1 diabetes, asthma, high blood pressure, and bipolar disorder. Kathleen was struggling to access all the prescription drugs she needed on very limited means. At times, that meant switching to lower-priced medicines that didn’t work as well or even going without certain drugs. During a visit to St. Luke’s Humphreys Diabetes Center, she learned she would be eligible for insulin and other needed drugs at no cost to her through the 340B program. “It made me feel so good, because every month, you have to figure out, ‘What medications can I fill this month?’” she said. While she previously had experienced multiple hospital admissions, once she enrolled in St. Luke’s 340B-funded program, she has not been hospitalized once.
Mikayla Robinson of Columbus, Ohio, visited Equitas Health, a federally qualified community health center, after she was diagnosed with HIV in 2006. With the help of affordable medication and care services from Equitas, her health has improved to the point where she now has an undetectable viral load. Today, a grateful Mikayla works at Equitas as a patient engagement specialist, offering prevention and treatment options for young people who are at particular risk for HIV, homelessness, and suicide.
Michael Hutson of Philadelphia was recovering from kidney transplant surgery at Einstein Medical Center when he was prescribed a $90,000 drug he needed to take to ensure his body would not reject his new kidney. Even though Michael had insurance, he was worried about his ability to afford the $500 co-payment that came with the life-saving medication. His social worker told him about the hospital’s 340B-funded program that would cover the cost of his drugs. Able to focus on his recovery, Michael soon was going on daily walks, taking his medication as directed daily, and participating in a kidney patient support group at Einstein. Without 340B, he says, “I don’t know what I would have done.”
Research Confirms 340B is Working
A large and growing body of research shows these stories are not unusual. Hospitals participating in 340B now provide 77% of all hospital care for Americans with Medicaid. These hospitals also account for 67% of all uncompensated and unreimbursed care while representing only 44% of hospitals in the country.
340B hospitals served on the front line of the national response to COVID-19 beginning early in 2020. At the same time hospitals were forced to put care restrictions in place that sharply reduced their revenues, the average 340B hospital also increased its uncompensated and unreimbursed care by nearly 10% to $38 million, the research found. By contrast, the average non-340B hospital provided $14.3 million in such care.
340B DSH hospitals also play a more prominent role in serving historically underserved populations including people with disabilities, those who are eligible for both Medicare and Medicaid, and patients who identify as Black or African American.
Few programs have shown the lasting, positive power of 340B. It also has retained its bipartisan support in an era when that is increasingly rare. 340B providers are engaged in some critical battles, including fights in federal court with a group of drug companies that are imposing unilateral and unlawful restrictions on access to 340B drug discounts. But 340B has stood the test of time through numerous challenges. Its supporters deserve a moment of celebration before getting back to the hard and vital work of caring for patients and communities in need.
When a married couple reaches their 30th anniversary, the traditional gift is a pearl to represent the strength of their union and the beauty of their love. 340B is a pearl that is certainly worth admiring.