HENSGENS: The Federal Drug Discount Program Is Not Delivering And Needs Some Fixing

Editor’s Note: A guest post by State Representative Bob Hensgens, who represents Louisiana’s 47th District and is Vice Chair of the Louisiana House Health and Welfare committee.

Sometimes relatively unknown federal policies have the biggest impact. One such program is the 340B drug discount program, created 25 years ago. The program was simple and the purpose was admirable. Hospitals and clinics serving a high proportion of needy patients were allowed to buy drugs at a steep discount so they could make them available to vulnerable or uninsured patients at an affordable cost.

Sadly, today the 340B program has not delivered on its promises. In many instances, the 340B benefits do not reach patients, and instead are used by hospitals to cover other costs.

Several studies show that hospitals’ charity care rate has dropped in recent years, at the very same time their revenue has increased. Avalere Health looked specifically at 340B entities and found that 64% have charity care rates below the national average. Common sense tells us that statistic should be reversed.

Clearly it is time to fix the 340B program. Its benefits need to reach the neediest patients and make a real difference instead of padding the bottom lines of large hospitals and national drug store chains.

Abuses to the 340B program also drive up Medicare costs and have a negative impact on healthcare pricing. A 2015 study by the Government Accountability Office found Medicare Part B spending was “substantially higher” at 340B hospitals, and that 340B hospitals were prescribing more drugs or more expensive drugs to patients.

Leaders like our own Senator Bill Cassidy are working to root out abuses within the 340B drug discount program and modernize it. We need to encourage him to keep up that fight so the program can truly help those in need.

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