The Gospel According to the Drug Industry


It’s become part of Big Pharma theology that hospitals in the 340B drug discount program don’t serve the poor and vulnerable. As much as the industry and its surrogates try, it can’t make the spurious accusation stick.  So it has resorted to repeating itself. Often.

The latest pharma-funded study updates a tired line of attack regarding 340B hospital charity-care levels. The strategy conveniently ignores the $25 billion in uncompensated care provided by 340B hospitals annually. That’s almost 60 percent of all uncompensated care. Nor does the drug industry acknowledge that 340B hospitals treat more than twice as many patients of color, more than twice as many disabled Americans and four times as many patients with end-stage renal disease.

As much as the drug industry works to mislead policymakers, charity care is not an eligibility requirement for the 340B program nor should it be. Many 340B hospitals have lower charity care levels because nearly all of their patients are Medicaid and low-income Medicare beneficiaries.   These hospitals still face enormous budget shortfalls due to insurance underpayment for services rendered.

To be eligible for 340B, nonprofit and public hospitals must certify annually with the government that close to 30 percent of their patients are poor or disabled. Most 340B hospitals treat much higher percentages than that.

As for the drug industry canard that there is “no evidence “ vulnerable patients benefit from the program,  a series of reports including one published in May show that 340B savings help fund direct care of the poor.  This includes free and discounted medicines, immunizations, medication therapy management and HIV/AIDS, cancer and other clinics. 340B also helps fund patient counseling, transport to the hospital and language translation services.

About 20 million more Americans have gained access to health insurance due to the Affordable Care Act. Yet, 93 percent of hospitals say that the 340B program is more important now than it was five years ago.

Why? They are seeing far more underinsured patients who cannot afford high co-pays and deductibles. Close to 80 percent of our members have seen an increase in the number of underinsured. According to the Commonwealth Fund, 31 million Americans fall into this group.  Add the estimated 30 million who remain uninsured and the scope of the challenge becomes clear. 340B hospitals serve all of them because it’s their mission.

If the pharmaceutical industry would re-direct its vast resources towards making drugs more affordable rather than mischaracterizing a critically important bipartisan health program, we would all be better off.

Ted Slafsky is President and Chief Executive Officer of 340B Health, a trade association of more than 1,200 hospitals in the 340B drug discount program.

Morning Consult