Kristin Jones: Protect drug discount program designed for vulnerable

Keywords Opinion / Viewpoint

As our leaders in Washington, D.C., seek ways to lower health care costs and increase access to quality care for all, they need to strengthen and protect programs that have a successful track record of bringing quality, low-cost coverage to millions.

In 1992, Congress created the 340B Drug Discount Program, which requires drug manufacturers to provide to qualified health care providers discounts—often as much as 50%—on out-patient medications. These providers include federal grantees, such as federally qualified community health centers and Ryan White HIV/AID clinics, as well as disproportionate-share hospitals that serve a higher amount of uninsured and vulnerable patients.

For nearly 30 years, the intent of the program has been for the providers to use the savings from the discounted drugs to lower costs for patients and reinvest in services that care for low-income populations. Unfortunately, that is not always what happens.

Although 340B discounts are intended to relieve patient prescription costs and support provider services to low-income communities, many major for-profit companies have in recent years increasingly benefited from the 340B system.

In 2010, drug supply chain middlemen, known as pharmacy benefit managers, were permitted to provide contract pharmacy services to 340B providers. In 2018, the Government Accountability Office found that the number of pharmacies contracted by 340B participants to dispense medications on their behalf has grown dramatically— from 1,300 in 2010 to close to 20,000 in 2017. What’s more, the majority of these contract pharmacies are multibillion-dollar chains like CVS and Walgreens.

In the June 2018 GAO congressional report on 340B contract pharmacies, a sample of 55 340B qualified health care providers showed only 23 of them (15 federal grantees and eight hospitals) reported they require the full discount be provided to the patient at the contract pharmacy.

In the cases where only some, or even none, of the discount is reaching the patients at the pharmacy counter, where are those discounts going? Members of Congress need to find out.

As lawmakers prepare for a possible review of 340B, it is important they seek transparency from pharmacy benefit managers and pharmacies contracted within the program. Just as with any other piece of our country’s health care system, increasing transparency within 340B, which has grown so dramatically since its inception, will help ensure that savings meant for the uninsured and underinsured is actually reaching them.

With one of the most robust health and life sciences industries in the country, Indiana companies spend years and billions of dollars developing the latest innovative medicines and therapies to treat conditions such as cancer, diabetes and heart disease.

Now more than ever, we need programs like 340B to ensure the amazing work of these companies and others around the country can reach and improve the lives of all Americans.•


Jones is president and CEO of Indiana Health Industry Forum, the trade association representing Indiana’s health science business community.

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