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Health Leaders Rally Support for 340B Drug Pricing Program

Kris Hague, 40, was diagnosed with stage four colon cancer in May 2013. After being denied chemotherapy treatment at an oncology clinic because he was uninsured, the Crowell, Texas, resident drove 240 miles every two weeks to receive treatment at a medical center in Dallas.

“All you want to do after treatment is lie down, and I had a four-hour drive ahead of me,” said Hague, who often had to take his three children with him.

Then, thanks in part to the 340B Drug Pricing Program, Childress Regional Medical Center – a 39-bed rural hospital close to Hague’s home – was able to establish a chemotherapy program. The 340B program provides discounts on outpatient prescription drugs to certain health care providers that serve large numbers of low-income and uninsured patients, and enables providers to offer more comprehensive patient services to these vulnerable populations.

“I started getting treatments at Childress in March 2014, and I started improving dramatically with the high-quality care that was closer to home,” said Hague, whose cancer is now in remission.

Hague’s story is just one of many examples of how the 340B program is helping patients and communities across the U.S. For more than 20 years, the 340B program has provided financial relief from high prescription drug costs to certain health care providers that care for low-income and indigent populations.

Hospitals use the 340B savings to provide clinical pharmacy services, financial assistance to patients unable to afford their prescriptions, oncology services and community outreach programs, among others.

Despite the 340B program’s proven track record of decreasing government spending and increasing patient access to vital medical services, some interest groups continue to criticize the program. They claim the program has grown out of control, lacks adequate oversight and should be scaled back significantly.

Let’s look at the facts.

  • The 340B program accounts for only two percent of the $325 billion in annual drug purchases made in the U.S.
  • To qualify for the program, hospitals must serve a large proportion of uninsured or low-income patients or be a critical access hospital that provides essential services to its rural community.
  • Hospitals must maintain auditable inventories for 340B and non-340B prescription drugs, undergo audits by the Health Resources and Services Administration (HRSA) – the agency responsible for oversight of the program – and recertify annually as a 340B provider.
  • Hospitals treat all patients who seek emergency care, regardless of their insurance status or ability to pay. In addition, hospital outpatient departments provide services to all Medicare and Medicaid patients, which is not the case for private physician practices and oncology centers.
  • Hospitals that participated in the 340B program provided $28.4 billion in uncompensated care in 2012.

When Congress created the 340B program more than 20 years ago, its purpose was to allow eligible entities to stretch limited federal resources to expand access to care for vulnerable patients. That’s what 340B hospitals have done and continue to do to help care for patients like Kris Hague.

And that’s why the AHA is sponsoring a briefing on Capitol Hill today at which leaders from Johns Hopkins Medicine in Baltimore, Providence Health & Services, based in Renton, Wash., Ascension Health, based in St. Louis, and University of Utah Hospitals and Clinics in Salt Lake City will share examples of how their 340B programs have helped their patients and communities.

Congress should preserve the 340B program and protect the low-income and uninsured patients who depend on it.


Richard (Rich) Umbdenstock is the President and Chief Executive Officer for the American Hospital Association

Richard Umbdenstock

Richard J. Umbdenstock became president and chief executive officer of the American Hospital Association (AHA) on January 1, 2007. Previously, he was the elected AHA Board Chair in 2006. The AHA leads, represents and serves more than 5,000 member hospitals, health systems and other health care organizations, and 43,000 individual members.

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