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Op-Ed: Working to Restore Transparency to Low-Income Rx Drug Program

In 1992, Congress created the 340B Drug Discount Program to help poor and uninsured patients afford their prescription drugs.  The program allows clinics and hospital that serve a large proportion of needy and uninsured patients to purchase drugs at a steep discount with the intent of passing those drugs along to their vulnerable patients.  

What started as a modest program has now grown to more than $12 billion in 2015 alone.

But while the program has grown dramatically, it is becoming increasingly apparent that the discount is not always reaching the patients in need.  And to make mater worse, many hospitals are taking the discounted drugs and selling them to their fully insured patients at full price and pocketing the profits.

340B serves an important mission. But critical to its sustainability is reform. Without forms passed by Congress, entities could continue to profit from the 340B program while providing minimal free or discounted care to uninsured or vulnerable patients.

A recent article by Politico looked at the top seven hospitals (of which more than half utilize the 340B drug discount program), and found that those hospitals' charity care fell by 35% between 2013 and 2015 while their combined revenue increased by $4.5 billion. The 340B program’s rapid and recent expansion also led the Government Accountability Office to report that federal oversight of the 340B program was inadequate.

Congress and policy makers must develop a more appropriate set of eligibility criteria for hospitals, accompanied by strong oversight, that will help ensure vulnerable patients directly benefit from the program.

When used as the law intended, the 340B drug discount program creates better health outcomes for needy patients, discounting and stretching scarce resources for vulnerable populations.

Congress needs to take action to modernize the 340B drug discount program to make it sustainable for years to come. They can start by defining who is actually an eligible patient and increasing transparency in how the program’s funds are used.

These changes will make a big impact in bringing the program back to its intended purpose: helping the neediest patients have affordable access to prescription drugs.

John Hayden is a lawyer from Newport, Ky., and a former Newport City Commissioner