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The Alliance for Integrity and Reform of 340B (AIR340B) issued a statement regarding West Virginia Senate Bill 325 (SB 325), a bill that would accelerate the unchecked growth of 340B contract pharmacies in the 340B program.

WASHINGTON – The Alliance for Integrity and Reform of 340B (AIR340B) issued the following statement regarding a request from U.S. Senator Bill Cassidy, M.D. (R-LA) for major contract pharmacies to provide information on their 340B profits as part of his investigation into abuses of the 340B program.

WASHINGTON – Today, the Alliance for Integrity and Reform of 340B (AIR340B) released a report analyzing the latest charity care data, from fiscal year (FY) 2021 which demonstrates that 69% of 340B disproportionate share hospitals (DSHs) provide charity care at rates lower than the national average for all hospitals.

Reaching nearly $54 billion in annual sales at the discounted 340B prices, the 340B program continues to grow, yet there are no requirements around how 340B hospitals use the discounts they receive to help low-income patients afford their medications. This report confirms more than two thirds of 340B DSH hospitals are not using the program to provide charity care.

“This analysis once again shows that a ballooning 340B program has not translated into a stronger safety-net or improve access to care through higher charity care levels. Instead, we see soaring CEO salaries, hospitals padding their pockets with the savings, and vulnerable patients taking a backseat to profits,” said Bob Dold, former Congressman and AIR340B spokesman.

This is the fifth iteration of this report spanning nearly 10 years and the findings remain the same: Despite more hospitals generating more profit from the 340B program, most 340B hospitals provide below average levels of charity care.

The average national level of charity care for short-term acute care hospitals is 2.5%. In comparison, this analysis found:

• 69% of 340B DSH hospitals provide charity care at rates lower than the national average.
• 36% of 340B DSH hospitals provide charity care that represents less than 1% of their total operating costs in FY 2021, and the number of hospitals at this rate is increasing.

• A small share of 340B DSH hospitals account for most of the charity care provided by all 340B hospitals – with just 25% of 340B DSH hospitals accounting for 80% of all charity care provided by all 340B DSH hospitals in FY 2021.
• Non-340B short-term acute care hospitals in the United States have higher average charity care (2.6%) than 340B DSH hospitals (2.5%), on average.

The report concludes the standards enabling hospitals to qualify for the 340B program must be strengthened and aligned to ensure only hospitals helping high numbers of low-income and vulnerable patients qualify for the program. This includes requiring 340B hospitals to provide charity care to uninsured, low-income and vulnerable patients.

AIR340B submitted a response to a bipartisan Senate request for information (RFI) on the state of the 340B program — an opportunity to discuss changes that are long overdue. While it’s encouraging to see Congress take notice of program loopholes, history has proven when it comes to prioritizing patients, empty promises frequently leave patients with little support.

On behalf of the Alliance for Integrity and Reform of 340B (AIR340B), thank you for the opportunity to share our perspective regarding steps Congress can take to improve health care outcomes within underserved communities.

The 340B Drug Pricing Program is intended to help low-income and vulnerable patient populations and the true safety-net providers that serve them, including many providers located in rural areas. Unfortunately, policy changes over time have led to more gaming and program abuses at the expense of underserved patients.

Analysis Raises Questions on How 340B DSH Hospitals Are Providing Care to Underserved Communities if They Are Not Located in Those Communities to Begin With

WASHINGTON, D.C. – According to an updated analysis out today, 65% of 340B disproportionate share hospitals (DSH) are not located in medically underserved areas (MUAs) – meaning even fewer are in MUAs than last time this analysis was done in 2021. The Alliance for Integrity and Reform of 340B (AIR340B) engaged Xcenda to conduct the updated analysis, titled, “340B – A Missed Opportunity to Address Those That Are Medically Underserved.”

“This report is yet another indication the 340B Drug Pricing Program is in dire need of oversight measures to ensure the program is reaching vulnerable patients,” said AIR340B Spokesperson and former Illinois Congressman Bob Dold. “Evidence that 65% of DSH hospitals are not located in MUAs illustrates shortcomings within the program that are allowing 340B hospitals to prioritize profits over the patients who should be benefiting from 340B savings. Exponential growth of the program is not slowing down, and data demonstrating the expansion of 340B DSH hospitals, associated child sites and contract pharmacies is not into MUAs is troubling.”

Key findings from the report include:

• Only 35% of 340B DSH hospitals were found to be located in MUAs, meaning 65% were not.
• Of the offsite facilities associated with the hospitals examined (also known as child sites), only 26% were found to be located in MUAs.
• Of the pharmacies in contracts with the hospitals examined, only 23% were found to be located in MUAs.

These findings, taken together, demonstrate a dwindling presence of 340B DSH hospitals and their associated facilities and pharmacies in our most vulnerable communities across the country. Given the 340B program was intended to be a safety-net program, there appears to be a disconnect. 340B hospitals and their facilities should predominantly be in MUAs if they are in fact reaching the vulnerable communities they claim to support to qualify for the 340B program.

AIR340B is a leading voice advocating for fixes to the 340B program, including accountability and oversight measures for the well-being of vulnerable patients. While the 340B program can serve as a vital tool for advancing health equity, evidence pointing to a lack of commitment to charity care and expansion into affluent communities raising concerns the program is not reaching the vulnerable patients it was intended to reach. It is not too late for Congress to address program flaws by making a commitment to addressing 340B loopholes once and for all.

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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.