Bearden: Texans Deserve a 340B Program That Puts Patients First

Some hospitals are buying life-saving medications for pennies, then charging low-income patients, including many with disabilities, hundreds of dollars for these drugs. They do it every day under a federal program meant to help uninsured and underserved patients access the care and medications they need. Instead, it’s become a money-making machine.

Now, state lawmakers in Austin are weighing House Bill 3265, which would expand this broken system – without fixing the problems that are driving up costs and putting patients at risk.

The federal program in question is called the 340B Drug Pricing Program, created by Congress in 1992 to enable safety-net hospitals to purchase prescription medications at steep discounts. The hope was that these 340B facilities would use those savings to provide medicines and other care at reduced prices to low-income patients.

In many cases, that’s not how it operates today. With virtually no rules or oversight, 340B has become a profit engine for many. Some 340B-eligible hospitals pocket the program savings instead of passing them on to patients, while pharmacy benefit managers and major pharmacy chains take their own cut.

A new report from the chair of the U.S. Senate Committee on Health, Education, Labor, and Pensions highlights the problem. The report illustrates how the program’s lack of transparency and oversight prevents “340B discounts from translating to better access or lower costs for patients,” said U.S. Sen. Bill Cassidy of Louisiana, the committee chair. The multi-year investigative report, he said, underscores the need for reform to ensure the program benefits vulnerable patients, who continue to face higher prices for their 340B medicines.

The numbers are staggering. One analysis found that some 340B hospitals are using the program to markup drug prices by as much as 700%. Another revealed some are buying insulin for 10 cents per vial – then billing patients hundreds of dollars. In Texas, where we have the highest uninsured rate in the country, the consequences can be especially severe.

Affordable, accessible healthcare is critical for those of us in the disability community who rely on daily medications to stay alive, avoid hospitalization, or live independently. When a program meant to support low-income patients becomes a profit center, it’s not just unethical – it can be life-threatening.

Despite good intentions, House Bill 3265 risks making a broken program even worse. It would expand 340B without adding the basic safeguards it needs. The bill includes no requirement that 340B hospitals limit excessive markups for low-income patients, no transparency to show where the money goes, and no oversight to ensure 340B is helping the people it was meant to serve.

Before Texas moves to expand 340B, lawmakers should ask tough questions. Are 340B hospitals using 340B income to provide more charity care? Are low-income patients seeing any relief at the pharmacy counter? And if not, where is the money going?

The answers aren’t hard to find. Over the past decade, the amount of money flowing to 340B hospitals, major pharmacy chains, and other entities through the 340B program has grown more than 18-fold, from $3.5 billion to over $64 billion. These profits are enriching numerous players within the system, including for-profit middlemen, while the very Texans 340B is supposed to help are left behind.

The 340B program still has promise but realizing that promise will require action in Washington. Reforms that ensure savings benefit underserved patients directly – or at the very least, that 340B hospitals and their contract pharmacies are transparent about how those savings are used – would be a step in the right direction.

Texans with disabilities, and all vulnerable communities, deserve a healthcare system that delivers real access and accountability. Expanding 340B without reform will only take us further from that goal.

Editor’s Note: The above guest column was penned by Chase Bearden, executive director of the Coalition of Texans with Disabilities (CTD). Founded in 1978, CTD is the largest and oldest member-driven cross-disability organization in Texas and is focused on advocacy, public awareness, and public policy. Online at txdisabilities.org.

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