By Jen Laws 

The federal 340B Drug Discount Program holds lifesaving power. It supports expanded access to care for patients with the most need through free or low-cost medications, health care, preventive services, transportation, and more. But we live in a world where good things like 340B are ripe for the pickings, and profit-seeking third parties are cashing in big.

What started as a program to help patients access health care services and medications through rural hospitals and certain clinics has turned into a $66 billion (and growing!) industry with more companies popping up every day to take advantage. Unfortunately, massive program growth does not mean massive patient benefit. In fact, a Wall Street Journal editorial and Congressional Budget Office report found that program growth – including the expanded use of “off-site” or “contract” pharmacies – has led to increased provider consolidation and inflated costs for patients, as well increased state and federal spending.

Even in 2018, oncology providers were calling out the obscene financial resources extracted by 340B contract pharmacies – especially those affiliated with pharmacy benefit managers (PBMs) – stating these conglomerates hoard discounts by “creating delays, denials, and higher costs for patients with cancer and others with serious illnesses.”

Through the contract pharmacy loophole, where 340B hospitals and clinics contract with an off-site pharmacy, for-profit companies are able to capitalize on discounted drug prices, thereby diverting savings away from patients in need. In practice, this has led to the top 4 pharmacy giants (Walmart, CVS, Rite Aid, and Walgreens) owning 71% of all contract pharmacies participating in the 340B program.

Without real oversight and accountability, these are the very types of deceptive, anti-patient behaviors that 340B has enabled over the years.

Unfortunately, Sacramento’s very own, Representative Doris Matsui, is going the opposite route. She recently introduced HR 4581, which follows in the footsteps of State Assemblymember Chris Rogers’ AB 1460 by enabling the unchecked expansion of contract pharmacies. Neither measure offers real program reform. Instead, these bills only serve to encourage more program exploitation by rewarding vertically integrated, corporate profiteering giants that are already abusing the program at the expense of patient benefit.

Already, patients are suffering from less competition among hospitals and health care providers because of higher prices, fewer access points, and reduced services. In fact, it’s been proven time and time again that hospitals eliminate services and see fewer low-income patients after being acquired by a for-profit entity.

As someone living with HIV and leading an organization in service of people living with HIV, Hepatitis C, substance use disorders, and co-occurring conditions, we rely on each other and our communities to navigate a burdensome and complex health system that, too often, treats us with derision and suspicion. It’s up to us to stand up to corporate profiteering and to call out the conflation of large health system interests with patients’ interests: although there is some convergence, it is not always the same.

Take for example what happens when hospitals decide administering treatment will hurt their profits: they simply discourage the necessary tests. Perhaps if 340B dollars were regularly reinvested into patient care, as they should be, paying these fees would not be so worrisome. Yet now that roughly half of the country’s hospitals participate in the 340B program, it is hardly a shock that patients’ needs fall through the cracks as large systems continue to expand and pursue exponential monetary gain. Even now, instead of working to protect existing patient programs, hospitals are lobbying for their share of the $50 billion rural health fund. It’s clear that hospitals continue to treat patient care as an afterthought.

While Representative Matsui may mean well, we hope the rest of the California delegation sees through her contract pharmacy loophole and instead chooses to support the 340B ACCESS Act – a measure focused on meaningful 340B Program reform that will ensure patients are directly benefiting from program growth.

We deserve elected officials who put us ahead of large health system and chain pharmacy greed. Proving that priority starts with implementing transparency and accountability within the 340B Program.

Jen Laws is the President & CEO of Community Access National Network (CANN).