The 340B Drug Pricing Program, a US federal government program created in 1992 requires drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at significantly reduced prices. The intent of the program is to allow these covered entities to "stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services."
Unfortunately, according to 340B and the Warped Rhetoric of Healthcare Compassion, a report by the Center for Medicine in the Public Interest (CMPI), a majority of 340B entities in Louisiana spend less than the national average on charity care. And amazingly, as many states limit the 340B program, the Louisiana Legislature is looking to expand the program with House Bill 548.
According to the CMPI report, 72% of private nonprofit hospitals had a fair share deficit, meaning they spent less on charity care and community investment than they received in tax breaks. The combined fair share deficit for private nonprofit hospitals was $17 billion, with individual hospital deficits ranging from a few thousand dollars to $261 million.
House Bill 548 bill is now headed to Governor Edwards’ desk for his consideration. If he looks at the facts rather than the rhetoric, his decision should be easy. Veto.
Louisiana communities of color, rural communities, and other vulnerable communities are not seeing the benefits. According to the Journal of the American Medical Association, 340B contract pharmacy growth is happening primarily in wealthy white neighborhoods, while the share of 340B pharmacies in Black and Latino communities has been on the decline.
The facts speak for themselves. Under current law, providers in Louisiana are under no obligation to reserve the discounts of such drugs for needy patients or even report what they do with the savings they obtain through 340B. Eligible hospitals, known as “covered entities,” can obtain all 340B medications from a drugmaker at the discounted 340B price and then bill privately insured patients — and even uninsured patients — for the drug’s full list price, helping themselves to the difference as pure profit.
Rather than caving into special interests, the Louisiana legislature should insist on greater oversight and accountability to the 340B program to ensure that hospitals and not-for-profit pharmacies are passing medication savings on to the Pelican State’s most needy patients.