STATEMENT REGARDING WALL STREET JOURNAL STORY
WASHINGTON, D.C., DEC. 20, 2022— Today, the Wall Street Journal published a lengthy story focused on the 340B drug pricing program. The story includes incomplete and misleading information about how 340B hospitals help patients and communities with low incomes obtain needed health care.
Published research documents how 340B benefits patients:
- 340B DSH hospitals provide significantly more care for patients with low incomes than do non-340B hospitals. In fact, 340B DSH hospitals provide three-quarters (77%) of all hospital care to people with Medicaid and two-thirds (67%) of all uncompensated and unreimbursed care (this includes charity care, bad debt, and the significant losses hospitals incur in treating patients with Medicaid due to low payment rates).
- 340B hospitals treat much higher proportions of patients with disabilities and those who are dually eligible for Medicare and Medicaid.
- 340B hospitals treat a higher proportion of people of color than do non-340B hospitals.
- 340B hospitals provide vital services that are unprofitable and, therefore, often unavailable in non-340B hospitals. This includes trauma and burn care, HIV/AIDS treatment, inpatient mental health care, medication management services that help patients understand and follow their treatment regimens, and transportation and translation services to make sure patients can access needed care.
- 340B savings are critically important to rural hospitals, which report they often use those resources to remain open.
- In health emergencies, 340B hospitals are our frontline defense. In fiscal year 2020, as the COVID pandemic began, 340B hospitals saw their already negative operating margins deepen (from -3.5% in FY 2019 to -6.1% in FY 2020). Despite that, those hospitals increased their uncompensated and unreimbursed care by more than 10% to an average of $38 million per hospital. In contrast, non-340B hospitals saw their operating margins increase to +3.5% but kept their uncompensated and unreimbursed care flat at an average of $14.3 million per hospital.
- By imposing penalties on drug companies that raise their prices faster than inflation, 340B helps curb price hikes for all Americans.
Congress created the 340B drug pricing program in 1992 to support the health care safety net that treats very large percentages of patients with low incomes by requiring drug companies to discount their prices for outpatient drugs. Savings from 340B enable safety-net hospitals, health centers, and clinics to “stretch scarce federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.” Savings from drug company discounts – not taxpayer dollars – pay for the care.
Contact: David Glendinning at david.glendinning@340bhealth.org or 202-536-2289.