Fact Check on Drug Discount Program

Gil Gutknecht
|
Posted: Feb 18, 2016 12:01 AM
Fact Check on Drug Discount Program

Founder John Adams famously said, “Facts are stubborn things.” It’s ?good to see conservatives debating the merits of the 340B drug discount program, but a fact check is in order.

First, the program -- which requires drug companies to provide discounted medications to health providers that treat high numbers of poor patients – is only open to nonprofit and public organizations. These providers supply $25 billion in uncompensated care every year to treat patients who cannot pay. As a group, these safety-net hospitals operate on razor-thin margins of 2 percent or less. Many are in the red.

Second, Congress created the program in 1992 specifically to help providers “stretch scare resources” and treat more patients. The funding mechanism is a private-sector solution and it does not depend on taxpayer money. In fact, hospitals provide 340B medications to eligible insured patients at market rates and use the income to help fund a variety of services for their underserved patients, including low-cost and no cost medication programs.

In effect, the drug industry (not taxpayers) funds the 340B program to the tune of about $3.8 billion per year. And Big Pharma doesn’t like it. Remember, this is an industry that is currently in the midst of one of the largest scandals in its history , typified by unscrupulous opportunists like Martin Shkreli.

The US drug market is anything but free. Most Americans don’t know the lengths to which pharmaceutical companies go to protect themselves from any real competition. They make eye-popping profits.

And we pay...through the nose.

Big Pharma’s surrogates would like us to believe the underserved aren’t getting the benefit of the 340B program. That is absolute nonsense! 

?In truth, safety-net hospitals treat more than twice as many low-income patients as other providers. According to a new report by the research firm Dobson and DaVanzo, 340B hospitals are also more than twice as likely to treat patients who are disabled, or who are dually eligible for Medicare and Medicaid; or who are African American or Native American.

How can any hospital get rich treating customers who cannot pay? Again, that is why the program exists in the first place, to help safety-net providers care for their most vulnerable patients. And it works, helping millions of Americans every year. These are real people who are treated by health providers in your community.

Despite attacks by Big Pharma to the contrary, the fact is that this program continues help hospitals provide care at a reasonable cost to the Medicare program. Medicare Part B paid 340B hospitals an average of 13 percent less for drugs than other providers.

Is it any wonder that 4,700 doctors who work with the program everyday recently signed a letter to Congress in support of 340B? They know the stubborn facts.