Council report: 340B program must be reformed

Exponential growth of drug pricing program driving up costs for employers, working families, taxpayers

WASHINGTON, DC – A new paper released today by the American Benefits Council shows how employers, working families and taxpayers are shouldering a significant cost of the 340B drug pricing program’s expansion, while the program is failing to sufficiently benefit the vulnerable patients it was intended to serve.

Growth Unchecked: A Call to Action for Policymakers to Reform 340B to Stop It from Driving Up Health Care Costs for Employers, Working Families and Taxpayers

“The 340B program was originally designed to help low-income patients more easily afford prescription drug medicines,” said Ilyse Schuman, senior vice president, health and paid leave policy. “Instead, health systems are using the program in profit-driven ways and passing higher costs on to employers, families and taxpayers – but failing to assist the low-income patients in vulnerable communities the program was originally designed to help.”

The Council’s paper first explores the exponential growth of the 340B program, driven by multiple factors including an increase in hospital-affiliated offsite outpatient departments, growth of contract pharmacy arrangements and a lack of transparency and oversight. Further examination reveals that the 340B program, as it is currently being used, is increasing costs for employer-sponsored health plans in numerous ways.

“The 340B program is raising health care expenses for employer-sponsored health plans by $5.2 billion annually through the loss of rebates,” Schuman said. “But the costs don’t end there. Exponential growth of the program is also fueling hospital and provider consolidation, which further contributes to health cost inflation, and promoting increased use of higher-cost therapies.”

Reforming this program is an important step for lowering health care costs. “Employers are deeply concerned about the significant cost that explosive growth of the 340B program has imposed on employer-sponsored health plans,” Schuman said. “We urge Congress to work with us on reforms to the 340B program that restore the program to its intent without raising costs for employers, employees and taxpayers.”

For more information on the Council's 340B report, or to arrange an interview with Council staff, please contact Jason Hammersla, vice president, communications, at (202) 422-4652 or jhammersla@abcstaff.org.

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