We might come from different political parties with different perspectives on many issues, but we’ve long agreed on one thing: prescription drugs cost too much, especially for America’s seniors. That’s why we’re encouraged that the Senate is pressing forward with long-overdue reforms to the costly and wasteful 340B prescription drug program, a program that is directly and unnecessarily driving up prices.
Senator Bill Cassidy (R-LA), the Chair of the Senate HELP Committee, recently concluded a hearing on the 340B program, which was initially designed to help low-income patients afford needed prescription drugs. In the preceding decades, the program, which was designed to help, has become a hindrance. Rather than reducing the price of medicines for the poor, the program has become a significant profit source for hospitals, many of which purchase the drugs at substantial discounts but then force patients to pay the full cost.
The hearing was a culmination of a year-long investigation revealing what most of Washington already knows -- a significant share of 340B revenue goes to for-profit middlemen and that often patients do not realize direct benefits from the program.” Senator Tammy Baldwin (D-WI), a key Democratic leader on the committee, echoed Senator Cassidy’s calls for reform, stating “we need more transparency.”
The simple truth is that the program has been hijacked. A New York Times investigation revealed how many hospitals direct 340B profits from programs meant for underserved patients to facilities in wealthier zip codes where more patients can pay the full costs. Meanwhile, “the growth of the 340B program is causing patients to pay more now for prescription drugs than ever before,” as it encourages overprescriptions. The more scripts these hospitals write, the more money they make.
The nonpartisan Congressional Budget Office (CBO) found that from 2010 to 2021, prescription drugs spending purchased through the 340B program increased by nearly 20%, far surpassing overall drug spending. This explosive growth is driving inflation across our healthcare system. The real motive behind this explosive growth is not health, but profit.
Both of us served in Congress as the 340B program evolved from a modest effort to help safety-net providers into a multibillion-dollar enterprise with minimal oversight. As a physician, Congressman Burgess saw firsthand how the program’s structure rewarded hospitals for prescribing more drugs (the more expensive the better). As a representative of a district that included many low-income families, Congresswoman Sánchez saw how the program failed to reach the vulnerable healthcare patients who needed it most. We both concluded that the 340B program needs accountability and reform.
It is time to restore 340B to its intended purpose. Patients should directly benefit from the program, not just the participating entities. Hospitals should be required to report transparently on how revenue is used, and for-profit middlemen who erode patient benefits should be held accountable. The Government Accountability Office has issued 20 recommendations since 2011 to improve the integrity of the 340B program. Only five have been implemented. That must change. Recent legislation introduced in the House by Rep. Earl L. “Buddy” Carter (R-GA) provides a roadmap for achieving this transparency and oversight, and Congress should give it serious consideration. We are also encouraged by reports that a bipartisan group of senators is having productive conversations that could lead to real reform in the upper chamber.
Despite today’s highly partisan climate, reforming the 340B program is one area where both parties can (and should) come together. True reform will not only save taxpayers money but also ensure that the program once again serves the patients it was created to help.
Michael Burgess is a physician, former member of Congress from Texas, and former Republican Leader for the House Energy and Commerce Subcommittee on Health.
Loretta Sánchez is a former labor attorney and Democratic Congresswoman from California.
