States Attempt to Lock in 340B Program Flaws

Across the country, state legislators are weighing proposals that could lock in the flaws of the $81.4 billion federal 340B Drug Pricing Program. Unchecked expansion of 340B drives up healthcare costs for the government, employers, and taxpayers, while vulnerable patients seldom see the benefits.

The 340B Drug Pricing Program allows large tax-exempt hospital systems to buy drugs at steep discounts but bill insurers, including government programs and employer-based health plans, at much higher prices. Current regulations do not require hospitals to use profits to benefit patients – which leads to massive abuse of the program, resulting in increased taxpayer costs.

Proposed state-level legislation would codify 340B abuse without addressing the program’s lack of transparency and oversight. These proposals risk cementing a system that puts hospital profits over patients, incentivizes consolidation, and increases costs for state programs, employers, and taxpayers.

State Resources on the 340B Program

The following resources include key data on 340B in states:

• Michigan Educational Handout: Michigan Lawmakers Should Reject Harmful 340B Legislation
• Kentucky Educational Handout: Kentucky Lawmakers Should Reject Harmful 340B Legislation
• Washington state Opinion Article: To reduce Washington health care costs, add transparency to 340B (The Spokesman-Review)
• Ohio Opinion Article: Don’t make the flaws of a federal drug program worse in Ohio (Cleveland.com)
• Texas Opinion Article: Americans deserve transparency in our healthcare system (Washington Reporter)

At its core, 340B is a federal program, and meaningful reform must happen at the federal level. The 340B ACCESS Act would increase transparency, strengthen accountability, and help ensure that savings reach the patients the program was created to help.