340B Hospitals:

What's The Story In Your State?

Learn more about levels of charity care in your state, the prevalence of contract pharmacies used to generate greater profits from the program and recent news coverage of 340B hospital practices that stand in stark contrast to the aim of serving vulnerable patients.

About 340B

Congress created the 340B Drug Pricing Program in 1992 to help low-income, uninsured and otherwise vulnerable patients gain better access to prescription medicines. Under this program, manufacturers provide discounted medicines to certain clinics and hospitals, otherwise known as “covered entities.” However, there is no requirement that certain covered entities pass these discounts on to patients or reinvest their 340B profits in free or reduced-cost charity care.

The 340B program has veered off course from its intended purpose. 340B hospitals, the pharmacies they contract with to dispense medicines and the pharmacy benefit managers (PBMs) and chain pharmacies that own these pharmacy locations are using this safety net program to earn massive profits. In 2022 alone:

  • Disproportionate share hospitals (DSH), which serve large numbers of low-income patients, captured $44 billion in 340B profits.
  • 340B contract pharmacies captured $10 billion in 340B profits.

And due to historically weak oversight, the 340B program has seen unchecked growth in 340B covered entities and their abuse of the program. The number of 340B contract pharmacies, for instance, has grown by more than 2,400% since 2010. Today, 340B is the nation’s second largest prescription drug program, second only to Medicare Part D.

Meanwhile, there is no guarantee that vulnerable patients benefit from this program. A recent study from the Government Accountability Office found roughly half of 340B hospitals do not provide discounts to vulnerable patients at their contract pharmacies.  Research also shows participation in the 340B program does not improve health outcomes for low-income patients.

We must hold chain pharmacies, PBMs and hospitals accountable to ensure vulnerable patients do not continue to suffer for the sake of corporate profits. To fix the 340B program, policymakers must:

  • Ensure 340B directly supports access for vulnerable, uninsured and indigent patients
  • Ensure program participants are operating as a true safety-net
  • Address program abuses through improved transparency, accountability and oversight

About AIR340B

The Alliance for Integrity and Reform of 340B (AIR340B) is a coalition of patient advocacy groups, clinical care providers and biopharmaceutical innovators dedicated to strengthening and sustaining the 340B program to ensure it directly supports access to outpatient prescription medicines for uninsured vulnerable patients.

Alliance members believe the 340B program is critically important to uninsured indigent patients and attention is needed to address concerns that the program has deviated from its original purpose and is leading to unintended consequences for patients.

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