Federal 340B Program Reform Needs Federal Reform – Not State Expansion

The Coalition of Hematology & Oncology Practices (CHOP) is heavily engaged at the state and federal level to ensure access to innovative, affordable healthcare – and we’ve had incremental success working on policies to lower out-of-pocket costs and improve access. We still have a long way to go and are disappointed by the recent trend of State Legislature exploring policies to expand the 340B Program, and its problems that are driving up profits for major corporations –instead of helping patients.

More than 1.6 million new cases of cancer are reported every year, and one out of every five deaths in the U.S. are caused by cancer. Low- and middle-income patients are more likely to die from their cancer diagnosis than high-income patients in the United States. Ensuring affordable access to healthcare for cancer patients is a top priority for CHOP to break this trend.

Like many state and federal policymakers, CHOP has kept a close eye on the multiple investigative reports of certain healthcare entities taking part in a federal program known as 340B – and its impact on healthcare access and affordability.

The federal 340B Drug Pricing Program was originally created by Congress in 1992 to ensure more affordable healthcare services and medicines to patients in need. The necessary and vital program has unfortunately diverted from its original intention, and Congress is hard at work on comprehensive reform to ensure it returns to its original intent with added transparency.

Certain 340B entities have announced record-setting profits on the back of a federal program aimed at supporting low-income and uninsured patients. Yet, the 340B program lacks the needed transparency to determine if and how much of these record-setting profits benefit the patients the program is designed to serve.

After an investigative piece from the New York Times, the Senate Health, Education, Labor, and Pensions Committee has launched an investigation into the program to examine how 340B entities spend the revenue they generate through the program. This stems from a Government Accountability Office report that found 340B serves higher-income areas with higher insurance rates, which goes against the mission and purpose of the program.

The U.S. Department of Health and Human Services Office of Inspector General also found that 340B entities often do not share discounts provided to them through the program with patients. For example, contract pharmacies through the 340B program generate a 72% profit margin on 340B medicines compared to a 22% profit margin through independent pharmacies. Yet, despite this, patients end up paying 150% more for their prescriptions at 340B entities than at non-340B entities.

As practice managers and business personnel in hematology and oncology practices, we know the financial burdens of cancer care. To improve the 340B Drug Pricing Program and ensure it provides for patients who need its help, it’s important to allow Congress to implement a set of policy principles to restore the program to its original intent, like ensuring that 340B prescriptions are provided to patients at a discount, preventing profiting off the program, and facilitating public reporting on the program. It’s premature to expand 340B at the state level.

Let’s work together to find real solutions for our communities and the patients we serve.