Opinion: Drug makers charge hospitals less for some medicines. Consumers aren’t getting the savings

Opinion: Drug makers charge hospitals less for some medicines. Consumers aren’t getting the savings

Jennifer Churchfield

– Jennifer Churchfield –

For a real New Year’s Resolution, we are calling on Colorado’s U.S. Senators Michael Bennet and John Hickenlooper – to help us account for billions spent on a healthcare program that leaves struggling families holding the tab. The Federal 340B program is becoming the poster child for federal programs run amok, allowing billions designated for affordable prescriptions to be lost within the system and leaving underserved families without the discounts they need. Ultimately, the 340B program is failing to deliver on its promises of affordable prescription medicines.

A study recently released by a non-partisan healthcare think tank conducted a comprehensive evaluation of this Federal 340B program and further concluded it is failing patients. Known as the “340B Drug Pricing Program” (or 340B for short), the program calls for drug companies to provide hospitals and other providers deep discounts on certain prescription medicines. The savings from the discounts should benefit patients in the form of lower prices at the drug counter.

Yet instead, lower income, marginalized community members, and under-served patients are seeing little benefits, raising major questions as to where the nearly $30 billion in savings are going.

The national study, conducted by the Pacific Research Institute, found that 340B hospitals are more profitable than traditional hospitals while not providing more charitable care. Four Colorado hospitals largely mirrored the national study — from Pueblo to Denver to Steamboat to Glenwood Springs.

The report evaluated each hospital’s net income relative to net revenue. The profitability for 340B hospitals is 37 percent larger compared to the average of all hospitals. The report also showed 340B hospitals provided less charity care at 1.66 percent of net patient revenues, compared to 2.03 among hospitals in the Centers for Medicare and Medicaid Services (CMS) database.

The growth premium for profits was even starker, with profits at 340B hospitals growing 9.1 percent annually over this period compared to profitability growth of 2.5 percent annually at (non-340B) hospitals and nursing care facilities. 340B hospitals also maintained more contract pharmacies than the average hospital. This is concerning as the PRI report found a link between the number of contract pharmacies and the likelihood of 340B discounts not getting to the patient, and rather, being taken advantage of.

Discounted 340B purchases were at least $29.9 billion in 2019, Drug Channels notes. That figure is 23 percent higher than just a year earlier and demonstrates the explosive growth of the 340B program with no oversight to confirm the discounts actually make it to patients. Astonishingly, the 340B program is now almost as large as the Medicaid program’s outpatient drug sales.

However, 340B lacks Medicaid’s regulatory infrastructure and controls. Medicaid rebates directly and transparently lower drug costs for the government, while 340B discounts disappear into providers’ financial statements.

It appears all but certain that with America’s ballooning health care system, the millions of dollars that should be off-setting prescription costs for vulnerable patients — are actually getting lost within our massive healthcare system.

The Colorado Health Advocacy Information Network (“CHAIN”) supports common-sense and market-based solutions to improve America’s health care system. We are asking Colorado’s Congressional delegation, especially Senators Bennet and Hickenlooper, to lead the call for a 340B program audit by the Congressional Budget Office. There’s a reason the U.S. The Supreme Court is currently being asked to weigh in on this complex issue and decide if 340B reimbursements are being taken advantage of.

The 340B program started a simple and supportable intent — to help vulnerable patients with chronic conditions. In 2022 we ask Colorado’s Senators to resolve to fix 340B. It’s well past time to bring the program back to that original purpose.

-Jennifer Churchfield, CHAIN Chair

Jennifer Churchfield joins the CHAIN Policy Advisory Committee

Jennifer Churchfield


Jennifer Churchfield

Jennifer Churchfield has partnered with public and private organizations for over 25 years. She is currently the co-chair of Front Range PharmaLogic. She served Arapahoe County as the Communications Director for Arapahoe Responsible Energy Advocates. Jennifer was elected for two-terms to the Cherry Creek School District Board of Education and was Board President from 2011-2013. She is a graduate of Miami University in Ohio.

Fight Policies That Endanger Access to Life Saving Medicines


Colorado doctors, patients, health care providers and experts are all expressing serious concerns about the impact a bill introduced in the state legislature this year will have on patients access to life-saving treatment. CO Senate Bill 175 threatens access to life-saving medicines by giving politicians control over what your doctor or hospital can pay for prescription drugs.  If the medicine costs more than what the state allows your doctor to pay, your doctor won’t buy the medicine, and you or your loved one won’t be able to get the treatment needed.

Those Most Vulnerable May Suffer the Most

Groups representing the disabled, LGBTQ, people of color, the underserved and Colorado’s seniors are speaking out in concern with SB175, especially the proposal that would let state politicians control prices and access to life-saving drugs.

Colorado small business owners and bioscience researchers are seriously worried about the impacts the bill will have on Colorado’s role as a leading medical research center.  And they are equally concerned about the gross interference in how life-saving medicines are priced and by extension how research happens.

Coloradans From All Walks of Life Speaking Out

This is just a partial list of the organizations speaking out against SB175’s provision to let state politicians control the cost and access to prescription drugs:

Colorado Society of Pharmacists
Colorado Retail Council
Colorado Gerontological Society
Adams County Regional Economic Partnership
The Citizens Council for Health Freedom
Colorado Sickle Cell Association
Colorado Council of Black Nurses
Front Range Pharmalogic
West Slope Pharmalogic
Jefferson County Economic Development Corporation
Club 20
Westminster Chamber
Envision: You (an organization that supports, educates and empowers members of Colorado’s LGBTQ + (mental health and well-being for the lesbian, gay, bisexual, transgender, and queer/questioning community)

You can read the specific concerns of many of these groups here:

The impact of Coloradans speaking against compromising care and treatment is being felt across our state.

These are a sample of recently published articles in newspapers throughout Colorado of people voicing concerns about not being able to access today’s life-saving medicines or seeing tomorrow’s cures be stopped in their tracks.

The impacts of Senate Bill 175 on our care are real.  But so is the impact of us speaking out.  Together we can stop SB175 from becoming law and cutting off our access to hures.

Mark Spiecker, STAQ Pharma: A state prescription drug board will backfire


Emily Zadvorny, Colorado Pharmacists Society: A state Prescription Drug Affordability board puts pharmacies, access to medication at risk

Jennifer Churchfield, Front Range PharmaLogic: State drug price limits would not drive down prescription prices

Rep. David Soper: Colorado Should Reject European-style price-setting board

Joni Inman, Front Range PharmaLogic: A prescription-drug price-control bill is the wrong answer for Colorado

Additional Resources

Opposition Testimony: CO SB 21-175 to establish a Prescription Drug Affordability Review Board

Senate Health and Human Services Committee, March 17, 2021

SB 21-175: Provider Testimony, Senate Health and Human Services Committee

Dr. Miller Head of Rocky Mountain Oncology Society, Chief Medical Director of Oncology; Associate Chief Medical Director of Clinical Research, SCL Health Cancer Center of Colorado

Governor and Legislature Drug Pricing Bill Harms Patients

“Prescription Drug Affordability (Price Control) Board” Means More Bureaucracy – Not Cheaper or more Accessible Medications for Patients


Get Involved

The Missing Colorado Healthcare Link

Linking the right policy ideas with the right influential people is a great start to solving our healthcare challenges. But it’s just the beginning.  

Fixing healthcare is our shared responsibility. And Colorado citizens like you are the missing link. With your trust and support, we can create lasting change.

We can solve healthcare in Colorado. Ready to link up with CHAIN?