The 340B Program

The 340B hospital markup program, now the second largest federal drug program, is driving up costs for patients as more tax-exempt hospitals and clinics exploit the program and mark up medicines.

The 340B Hospital Markup Program

Big, tax-exempt hospitals and clinics are taking advantage of a little-known federal program to boost their profits – marking up medicine prices by thousands of dollars. While the program was initially focused on safety net care for qualified clinics and about 50 hospitals, it’s become less about patients and more about boosting the bottom line of tax-exempt hospitals and for-profit pharmacies.

Here’s what that can look like in practice:

Marking up medicines by as much as 1000% or more, driving up costs for patients, taxpayers, and employers.
Burying vulnerable patients with medical debt by charging them the full price even for 340B medicines purchased for just one penny.

The 340B program jeopardizes access, specifically for low-income and vulnerable patients, by allowing participating hospitals and clinics to hike up the price of medicines. There’s no transparency or guardrails on how hospitals use profits from the program and no clear evidence that the money is going to patients in need. If patients aren’t benefitting, where’s the money going?

What Congress Can Do

Fixing the 340B hospital markup program and making it work as intended is possible. Federal reform must:

Ensure benefits reach low-income patients. All hospitals and the for-profit pharmacies they contract with should be required to pass 340B discounts on to patients.
Confirm true safety-net participation. Congress should ensure that 340B hospitals provide meaningful levels of charity care to uninsured and low-income patients.
Strengthen accountability and transparency measures. Implement stronger, common-sense accountability measures and increase transparency to improve program oversight.