A new study by Drs. Rena M. Conti and Peter B. Bach makes a valuable contribution to the growing body of evidence on the harm being done by a federal program that Congress designed to increase poor people’s access to prescription drugs, but has been perverted by hospitals to pad their bottom line.
The 340B program was legislated in 1992. It gives the federal government the power to force drug-makers to offer deep discounts on medicines dispensed to outpatients. 340B was supposed to be a win for both poor people and taxpayers: By forcing drug-makers to discount prices, it would reduce poor people’s costs, and therefore the demand for federal subsidies to safety-net facilities in those areas.
The number of hospitals and other facilities taking advantage of 340B had doubled in ten years. Conti and Bach explain how, where, and why this is happening. The key is that, although hospitals get the discounts, there is no effective way to ensure that the discounts are passed on to poor people. Once the discounted drugs are inside the hospital system, they are just added to the inventory.
Conti and Bach review disturbing cases: