Central PA News

The head of a Pennsylvania health care reform group said the federal 340b drug discount program needs reform to "serve its true purpose" to rural Pennsylvanians.

"Rural Pennsylvanians deserve healthcare that prioritizes their needs, not the financial interests of large institutions," Jennifer Riley, executive director of Patients Come First-PA, wrote in an op-ed in The Express. "Reforming the 340B program to serve its true purpose is a clear way to help create a healthcare system that is fair, compassionate, and effective for everyone."

"When patients come first, our healthcare system becomes a stronger foundation for all."

Established in 1992 and administered by the Health Resources and Services Administration (HRSA) the program aims to provide financial relief to healthcare providers serving vulnerable populations, allowing them to stretch their scarce resources and reach more eligible patients.

Hospitals participating in the 340B program can use the savings to fund essential services and programs, such as free or low-cost medication assistance, expanded access to healthcare, and community outreach initiatives.

At least 77 Pennsylvania hospitals participate in 340b, according to 340bHealth.

Participating hospitals, however, “often extend their 340B discounts to clinics in well-off communities, where they can charge privately insured patients more than those on Medicaid,” reported the Wall Street Journal.

“In some cases, the program appears to be bolstering profits in well-off areas more than it is underwriting services in less-privileged neighborhoods,” said the Journal article.

"Rural Pennsylvanians are disproportionately affected by this misuse, as poverty and poor health outcomes are closely intertwined," wrote Riley. "Limited financial resources significantly hinder access to adequate healthcare and necessary treatments, making it more challenging for individuals to manage chronic diseases."

Dr. Anthony DiGiorgio, a neurosurgeon and senior affiliated scholar at the Mercatus Center at George Mason University, told Show-Me State Times that drug discounts often aren’t passed along from the hospitals to the patients.

“Because the discount is mandatory, many drugs come out with higher list prices than they normally would, but patients pay that copay at the higher list price,” he said. “Patients are actually paying more than they otherwise would if the 340b program didn't exist.”

The U.S. House Energy and Commerce Oversight and Investigations Subcommittee held a June 2024 hearing on the 340b program. U.S. Rep. John Joyce (R-PA-13) said in during the hearing that the program’s growth has created “misaligned incentives” that are driving up patient costs. 

“This growth has created misaligned incentives across the entire health care system, leading to further consolidation that drives up prices for every patient,” said Joyce.