340B Health President and CEO Ted Slafsky Statement on NAS Report on Prescription Drug Costs
Washington, D.C.,—The National Academies of Sciences new report “Making Medicines Affordable” draws much needed attention to the problem of expensive and increasingly unaffordable prescription drugs. We wholeheartedly agree that medicines must be made more affordable for patients and the hospitals and other institutions that care for them. The 340B drug discount program is one of the best examples of a federal government policy that actually reduces drug prices.
Congress created the 340B program in 1992 to enable safety-net healthcare providers to stretch scarce resources as far as possible, reaching more eligible patients and providing more comprehensive services. It requires drug makers to provide discounts to clinics, hospitals, and health systems that serve significant numbers of low-income patients. Research shows that hospitals rely on their 340B savings to fund critical programs for their low-income, Medicaid, uninsured, and underinsured patient populations. 340B hospitals serve significantly more low-income patients and provide significantly more uncompensated care than non-340B hospitals. 340B hospitals treat much higher numbers of low-income patients with cancer than non-340B providers. 340B hospitals also serve more seniors who are disabled, dually eligible for Medicare and Medicaid. 340B hospitals provide services that are critical to low-income patients including labor and delivery, trauma care, opiate addiction treatment, and HIV/AIDS services.
340B drug discounts ($6.1 billion in 2015) represent 1.3 percent of U.S. drug sales, yet they support care for millions of patients in need.
We support the Academy’s call for transparency in the 340B program. Hospitals are among the most transparent of all organizations. They report their costs and charges to the U.S. Department of Health and Human Services through annual Medicare Cost Reports. Non-profit hospitals must report various categories of revenue spent to serve low-income patients and communities at large to the Internal Revenue Service. We appreciate that the report recognizes a need for greater transparency among pharmaceutical manufacturers.