U.S. Sen. Bill Cassidy (R-La.) said that Congress needs to reform the federal 340b federal drug discount program, after he released the results of an investigation showing ‘transparency and oversight concerns’ with the program.
At least 22 NJ hospitals participate in 340b, according to 340bHealth.
“This investigation underscores that there are transparency and oversight concerns that prevent 340B discounts from translating to better access or lower costs for patients,” said Cassidy. “Congress needs to act to bring much-needed reform to the 340B Program.”
“I look forward to continuing my efforts to bring transparency and improvements to the 340B Program,” said Cassidy.
The Senate HELP Committee report, led by Cassidy, revealed that Bon Secours Mercy Health and the Cleveland Clinic generated hundreds of millions of dollars in revenue through the 340B Drug Pricing Program but did not directly pass these discounts to patients. Instead, the revenue was used for capital improvement projects and community benefit programs without specific accounting for 340B funds.
Established in 1992 and administered by the Health Resources and Services Administration (HRSA), the program aims to provide financial relief to healthcare providers serving vulnerable populations, allowing them to stretch their scarce resources and reach more eligible patients.
Hospitals participating in the 340B program can use the savings to fund essential services and programs, such as free or low-cost medication assistance, expanded access to healthcare, and community outreach initiatives.
Participating hospitals, however, “often extend their 340B discounts to clinics in well-off communities, where they can charge privately insured patients more than those on Medicaid,” reported the Wall Street Journal.
“In some cases, the program appears to be bolstering profits in well-off areas more than it is underwriting services in less-privileged neighborhoods,” said the Journal article.
An analysis published last year by Dan Crippen, the former director of the Congressional Budget office, estimated the 340b program reduces state and local tax revenues by $3.5 billion annually, on top of reductions in federal tax revenue
“Even at current levels, the 340b Program results in a large transfer of taxable income to non-profit entities,” Crippen wrote. “As a result, last year alone, federal and state tax revenues were reduced by as much as $17B.”
“The value of the 340b discounts is estimated to be $70 billion last year alone,” said Crippen.
As per his website Senator Bill Cassidy, M.D. (R-LA), serves as the Chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee. A gastroenterologist by training, Cassidy has been a U.S. Senator since 2015, previously serving three terms in the U.S. House of Representatives. He is known for his work on healthcare policy, particularly regarding Medicaid and drug pricing reform.
