The 340B Drug Pricing Program, or 340B, was created by Congress in 1992 to help low-income and uninsured patients access the care they rely on to stay healthy. Through 340B, qualifying hospitals and clinics serving a large number of vulnerable patients can purchase deeply discounted medicines directly from pharmaceutical manufacturers with the expectation that they use these savings from acquiring deeply discounted medicines to help patients to afford and access their necessary medications.

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While originally intended to serve the most vulnerable patients, a lack of federal oversight has allowed 340B to evolve into a growing profit center for many hospitals and for-profit corporations. Many large hospitals that participate in 340B are marking up the cost of medicines instead of using the discounts received to improve access to care. Medicine price mark-ups are almost 7x higher at 340B hospitals than at independent clinics.

 

In addition, 340B hospitals are able to also contract with an unlimited number of pharmacies, many of which are out-of-state and owned by the nation’s largest pharmacy benefit managers (PBMs) and insurers. As a result, PBMs and 340B contract pharmacies are raking in massive profits from marked up 340B medicines – without passing any savings acquired by buying in bulk medications at 340B pricing on to patients.

                                                                                   

Unfortunately, Georgia state lawmakers have introduced new legislation that will facilitate further abuse of the 340B Program by prohibiting manufacturers and wholesalers from placing any restrictions on how many pharmacies a 340B hospital can contract with.