Sam (not his real name) suffers from advanced liver disease, which makes it hard for him to work at times. He can’t afford a plan on the health insurance exchange, but he earns a little too much to qualify for Medicaid. It’s also tough for him to travel the long distance to the hepatitis C clinic at the University of California (UC), San Diego, where he gets care. So the clinic has arranged to consult with him by phone, get him medication at a very low cost, and when Sam is feeling particularly ill, have medications shipped directly to his home.
Sam is one of countless patients who receive assistance thanks to the 340B Drug Pricing Program. Created by Congress in 1992, the program allows certain institutions to purchase outpatient medications from pharmaceutical companies at a discount. Some examples of hospitals that qualify are those that treat a high percentage of Medicaid and uninsured patients, rural hospitals, and certain children’s hospitals. The institutions then use the savings to provide patients with access to diverse services in their communities.
“Without the opportunities we’re giving this patient, he says he would have no chance of getting treatment,” explains Lucas Hill, PharmD, a pharmacist at the San Diego clinic.
Across the country, savings from the 340B program fund a huge range of supports: smoking cessation, drug treatment, transportation to appointments, mobile clinics with bilingual providers, access to healthy food, and more.
“The 340B program is one of the most effective health care programs... There is no cost to taxpayers, and it allows hospitals to provide lifesaving programs to their most vulnerable patients and communities.”
Jason Kleinman, AAMC senior legislative analyst
“The 340B program is crucial to safety-net hospitals—hospitals that provide care for large numbers of low-income and underinsured populations—many of which are teaching hospitals,” says Jason Kleinman, AAMC senior legislative analyst.
A key point is that 340B is a good deal economically for society, notes Kleinman. “The 340B program is one of the most effective health care programs. It represents less than 3% of total U.S. drug sales. There is no cost to taxpayers, and it allows hospitals to provide lifesaving programs to their most vulnerable patients and communities,” he says.
In a recent Medicare outpatient payment rule, the Centers for Medicare and Medicaid Services cut Medicare drug reimbursements for 340B hospitals by almost 30%—a total of $1.6 billion a year—beginning January 1, 2018. This cut means that participating hospitals will not benefit as much from the 340B drug discount and will have less money for the services they've been providing. Since the rule was announced, the AAMC and other organizations have been battling the cuts through litigation and proposed legislation.
“Without the full 340B savings, many needed local supports will be at risk," says Kleinman. “In the end, underserved and low-income people are the ones who will suffer.”