Letter: 340B Drug Pricing Program Needs Protection, Not Fundamental Reform

A security officer enters the Scripps Mercy Hospital San Diego emergency entrance

A security officer enters the Scripps Mercy Hospital San Diego emergency entrance. Photo by Chris Stone

While no government program should be immune from criticism, those who call for reforms should at least understand how the 340B program works. The recent column, “It’s Past Time for Congress to Reform 340B—Patients and Clinics Are at Risk,” relies on talking points straight from the drug companies’ playbook.

Big Pharma hates the 340B program because it eats into drug company profits — profits that, unlike safety net provider 340B savings, have no accountability for their use at all. Here’s how the program actually works:
340B enables safety net providers to buy discounted drugs from drug companies. The program costs taxpayers nothing. Safety net providers can use 340B savings — that is, the difference between the 340B cost of a drug and the reimbursements paid by private health insurers — to stretch scarce federal dollars and provide more services to more people.

Parroting the Pharmaceutical Research and Manufacturers of America’s talking points, the author criticizes providers that generate resources from the 340B program in this way, but that is exactly what Congress intended when the program was created.

By definition, 340B providers are nonprofits and cannot turn a profit. Unlike drug companies, they are legally required to use their resources in furtherance of their mission.

As the opinion piece notes, the resources generated are a lifeline for rural hospitals, hemophilia clinics, and other providers essential to maintaining the safety net. The program needs protection, not fundamental reform.

Laura Boudreau
AIDS Healthcare Foundation
Los Angeles