Black Women Rising leads multi-stakeholder letter to Congress outlining concerns with 340B Drug Discount Program

Honorable John Thune Honorable Debbie StabenowHonorable Shelly Moore CapitoHonorable Tammy BaldwinHonorable Jerry MoranHonorable Ben Cardin

United States SenateWashington, DC 20510

Submitted electronically to Bipartisan340BRFI@mail.senate.gov

Dear Senators Thune, Stabenow, Moore Capito, Baldwin, Moran, and Cardin:

The undersigned organizations, representing health care consumers, patients, and community organizers, are pleased to respond to your request for information (RFI) dated June 16, 2023.While some of our organizations have publicly spoken out on the 340B program in the past, for many of us, this is the first time wading into this nuanced issue.

We wanted to take this opportunity to echo the concerns you have heard from other stakeholders about ambiguity in the program, lack of oversight and accountability, and the degree to which 340B is currently fulfilling its intended purpose of serving vulnerable patients and communities. Many of our organizations have further consideration to do before we can endorse specific proposals, and we plan to share input to that end in the coming months as the legislative conversation continues.

Of immediate concern is the glaring lack of data and transparency in program. Despite theprogram being more than 30 years old, 340B entities are still not required to calculate and reportthe amount of 340B revenue they receive, nor how they reinvest those revenues in theircommunities – an astounding fact, considering the program now accounts for more than $40billion in sales each year.1 We are concerned that the program’s opaque nature, combined witha lack of requirement that discounts be shared with patients or used for charity care, means that340B is not fulfilling its mission or meaningfully improving patients’ lives. This is particularly troubling at a time when health care costs are rising and medical debt is widespread and growing.

Among our chief concerns with the 340B program are:

340B hospitals are free to engage in predatory practices like balance billing andaggressive medical debt collection – even for uninsured patients and those with limitedincomes.

Hospital eligibility criteria for 340B do not align with what makes a true safety-netprovider; the program and the health system as a whole have changed since 340B’screation in 1992 in a way that has fundamentally altered hospital economics and patientmix. Today, the 340B program includes hospitals like Mass General, the ClevelandClinic, Duke Hospital, Cedars Sinai, and Johns Hopkins, some of the largest andwealthiest systems in the country.

Growing evidence suggests that 340B creates a significant incentive for healthsystem consolidation,with hospitals able to purchase drugs at a steep discount on agiven prescription compared to independent physician offices.4 This provides anincentive for hospitals to purchase these facilities, especially those in high-income areaswhere most patients are commercially insured, so the hospital system can increase theoffice’s profitability.

There are no requirements that hospitals profiting from the program expandaccess to care in vulnerable neighborhoods – as recent reporting in the New YorkTimes has shown5 – or report how they use 340B funds.

The Government Accountability Office (GAO) has called numerous times over thepast decade-plus for greater oversight of the program by its governing body, theHealth Resources and Services Administration (HRSA), with little progress made toimprove program integrity.

All in all, 340B has expanded seven-fold in the last 15 years. Big hospital systems account for most of that growth and three-quarters of 340B revenue, while the number of Americans experiencing medical debt is higher than ever. As Congress considers legislative reforms to the 340B program so it works better for the communities and patients it was intended to serve, we urge you to use this opportunity to help uninsured and underinsured patients access discounted medicines, affordable care, and benefits to their community promised through 340B.

Our organizations will be considering more specific policy solutions in the coming months and look forward to contributing to the discussion about how to preserve the mission of this vital program for the patients and communities we represent and our nation’s true safety-net providers.