Sprawling government health care programs can mean billions are wasted or misappopriated. The 340-B program, a $29b effort to lower the cost of prescription drugs for those most in need, is a classic case. The program has morphed into a source of profits for hospitals and other providers, taking billions in benefits away from low income and underserved families in need. CHAIN is working toward restoring integrity to the 340-B program, and calling out similar government initiatives that have gone off course.
In recent years, policymakers have expressed concerns about the high prices of prescription drugs. Those drugs offer wide-ranging benefits, such as reducing the need for services provided by physicians and hospitals, improving the quality of life, and extending life. However, high prices reduce consumers’ access to such medications. They also contribute to higher spending that strains budgets, including the federal budget.
The 340B program is a classic case of good government intent can morph into abuse, and why we should exercise extreme caution with further government intervention.
According to the Pacific Research Institute:
By attempting to help vulnerable patient populations in such an overly complicated manner, the 340B program creates inefficiencies throughout the broader healthcare system… These include vulnerable patients not receiving any of the price savings, the abuse of the 340B program by covered entities, increased incentives to prescribe more expensive medicines, a shifting of drug costs on to non 340B patients, and an unwarr-anted consolidation of medical practices. Due to these inefficiencies, the 340B program worsens the quality of the overall health care system.
Instead of drug discounts flowing to those families most in need, the PRI report demonstrates how millions of dollars are likely flowing to the coffers of hospitals and other providers.
A report by the non-partisan Government Accountability Office (GAO) layout out the path for greater accountability. The GAO found major gaps in the administration of the program and lax accounting/reporting standards. They conclude their work with six strong recommendations for reforming how the 340B program operates, including audits that verify the proceeds from discounted drugs are being used to lower the cost to consumers in need.
CHAIN fully supports Coloradans engaged in demanding greater accountability and transparency in the 340B program. We urge everyone to look at 340B as the cautionary tale for why creating massive government programs to address health care inequities should be among the last strategies used.