Little-Known, Big Government Program

In America, federal health care programs should do two things: put patients first and safeguard taxpayers’ hard-earned money. That is how you honor every family fortunate enough to call this great country home. Unfortunately, one major program is failing – and it must be fixed.

Washington sold the 340B Drug Pricing Program as a way to help struggling families: hospitals buy medicine at steep discounts, then pass those savings on to patients. Here’s the truth: there’s no requirement hospitals spend a single dime of those savings on patients. Instead, they resell the drugs at full price, pocket the profits, and call it a “safety-net.”

• Even the Congressional Budget Office admits, medication purchases through the 340B Drug Pricing Program swelled from $6.6 billion to $43.9 billion in just over a decade.

• Fraud and abuse are baked into the 340B program. The federal agency responsible for oversight, HRSA, audits less than 1 percent of hospitals each year.

• Meanwhile, unlawful “duplicate discounts” – when hospitals stack 340B discounts on top of Medicaid rates – have exploded from $135 million in 2014 to $1.6 billion just five years later.

The Wall Street Journal editorial board recently called 340B “a classic example of a well-intended policy that has caused unintended harm,” noting that spending in the program has surged 11-fold since 2010 and now exceeds Medicaid’s pharmaceutical spending.

The 340B program drains Medicaid by blocking states from collecting drug rebates while also letting hospitals mark up expensive medicines, driving higher costs for taxpayers, employers, and working families.  In fact, a recent study found Medicaid loses $6.5 billion every year as a result of hospitals’ 340B abuse. 340B has become a hidden tax on patients, employers and every taxpayer in this country.

The 340B program is proof that when government looks the other way, big institutions will game the system at the expense of working families. Congress must step in, demand transparency, and ensure every dollar is used for patients as intended. Until then, 340B will remain a symbol of Washington’s broken promises and a bill that taxpayers can no longer afford to pay.