340B Discount Drug Program Still Meets Important Needs

More than 25 years ago, Congress created the 340B Drug Pricing Program to allow eligible hospitals and health systems to stretch limited resources and expand access to care for vulnerable patients. But despite a proven track record of increasing patient access to vital medical services and decreasing government spending, some want changes that would weaken the program.

The 340B program generates valuable savings for eligible hospitals to provide free or reduced priced prescription medications to vulnerable patient populations. In addition, it allows hospitals to reinvest in health care programs that enhance patient services, offer free vaccines, and provide services such as those within mental health clinics, medication management programs and community health programs. Nearly 100 Iowa hospitals participate in the program.

Section 340B of the Public Health Service Act requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to health care organizations that care for many uninsured and low-income patients. Participating hospitals can achieve savings of 25 to 50 percent on pharmaceutical purchases. To qualify for the 340B program, hospitals must serve a disproportionate share of low-income and uninsured people or be Critical Access Hospitals providing essential services to their rural communities. These hospitals must also provide services to low-income populations that do not qualify for Medicaid or Medicare. And let us not forget that the 340B program involves no federal spending.

The 340B program remains faithful to its original intent as defined by Congress in 1992. As passed by Congress, this program was designed to play an important role in helping hospitals stretch already scarce resources to expand access to care, enhance community outreach programs and offer unique health services like free vaccines, clinical pharmacy benefits, and smoking cessation classes. This includes, but is not limited to, improved access to outpatient prescribed prescription medications. Given the increasingly high cost of prescription medications, the program is just as relevant and critical now as it was when Congress created it.

Iowa hospitals participating in the 340B prescription drug program do so because it allows them to provide low-cost or free prescriptions, expand services and improve access to care for Iowa’s uninsured and low-income populations, just the way it was meant to do so.

Hospital leaders are concerned that scaling back the 340B program would force hospitals to curtail or even eliminate services that are essential to keeping patients and communities healthy. Congress should heed the concerns of providers on the front lines of care – and toss aside the arguments of those who wish only to add to the record profits of pharmaceutical companies.