Molly Jenkins, Director of Public Affairs for PhRMA, said the 340B program lacks transparency and enables hospitals to drastically raise drug prices. The statement was made in a blog post.
‘The little-known federal 340B program lets hospitals buy medicines for as little as a penny and mark up the price by thousands of dollars,’ said Jenkins. ‘Since there is no transparency or guardrails on how hospitals and clinics use 340B profits, the money often is not going to help patients afford medicines. Instead, the program drives up costs for patients, taxpayers and employers with hospitals marking up medicines by as much as 1,000% or more.’
The 340B Drug Pricing Program was created by Congress in 1992 to help hospitals and clinics that serve vulnerable populations purchase outpatient drugs at reduced prices. Eligible providers can use the savings to improve care, but there are no federal requirements for how the funds must be spent. According to the Association of American Medical Colleges (AAMC), while the program supports care for low-income and rural patients, it faces increasing scrutiny over a lack of transparency and regulatory oversight.
A 2021 report by the Government Accountability Office (GAO) found that hospitals participating in the 340B program do not always offer discounted drug prices to low-income or uninsured patients. The GAO noted that providers often keep the margin from drug discounts without reinvesting in patient care. The report also highlighted a lack of federal oversight to track how 340B revenues are used.
PhRMA reported that in New York, 113 hospitals participate in the 340B program, holding over 6,000 contracts with pharmacies nationwide. However, only 24% of these contract pharmacies are located in medically underserved areas, and 86% of participating hospitals provide below-average levels of charity care. This disparity has raised concerns about the program’s effectiveness in reaching its intended beneficiaries within the state.
Molly Jenkins is the Director of Public Affairs at PhRMA, the Pharmaceutical Research and Manufacturers of America. She leads communication initiatives related to pharmaceutical policy and health care access. Jenkins has a background in strategic health policy communication and advocacy across both public and private sectors.
