340B grows and grows, but patients do not see the savings

The numbers are in and the 340B Drug Pricing Program is the second largest federal drug program for another year in a row.

As a federal safety-net program that is supposed to help vulnerable patients access affordable medicines, the exponential growth of 340B over the years should have resulted in tangible benefits for patients. But that isn’t the case. Unfortunately, hospital systems and the chain pharmacies they contract with are exploiting the program to generate massive profits off the backs of hardworking Americans.

In an update to their previous report, the Berkeley Research Group compared sales across federal prescription drug programs to put the size of the 340B program in context.  

• How big is the program when looking at sales at the discounted 340B price? Taking the HRSA reported sales number and adding in direct sales, AIDS Drug Assistance Program sales and specialty distributor sales (all of which are excluded from HRSA’s reported number), BRG estimates total 340B-discounted sales reached $54.6 billion in 2022, more than double the size of the program just five years prior.  

• How big is the program when looking at sales at the estimated undiscounted price? Taking $54.6 billion and assuming an average discount of 57%, BRG estimates 340B sales measured at wholesale acquisition cost reached $126.3 billion in 2022. It’s important to note that 340B discounts can range drastically, sometimes reducing the price to acquire a medicine to as low as a penny.  The 340B program also accounts for an increasing share of U.S. spending on brand medicines. In 2022, 340B accounted for 18% total U.S. brand outpatient drug sales, 60% higher than in 2017.  

Either way you measure the program, in terms of sales, 340B dwarfs all federal prescription drug programs except Medicare Part D.

The 340B program also accounts for an increasing share of U.S. spending on brand medicines. In 2022, 340B accounted for 18% total U.S. brand outpatient drug sales, 60% higher than in 2017.

Despite its massive size, 340B has zero reporting requirements and zero patient protections to ensure the program is working as it should. Many hospital participants are not located in medically underserved communities, provide very little charity care and, alarmingly, engage in aggressive debt collection practices.