The American Benefits Council is urging Congress to consider the cost to employers, workers and their families as it proposes changes to the 340B drug pricing program.
“The council opposes legislation such as the 340B PATIENTS Act that would raise costs for working families with employer-sponsored health coverage and urges Congress to instead work with us on reforms to the 340B program that restore the program to its intent without raising costs for employers, employees and taxpayers,” said Ilyse Schuman, the council’s senior vice president for health and paid leave policy.
The 340B program has grown exponentially since it was enacted in 1992 to help expand services and make health care more affordable for vulnerable patients treated at specific facilities.
“Contrary to assertions that the 340B program does not impose any costs on taxpayers, it is the case that employers, employees and, therefore, taxpayers are shouldering a significant cost of the program’s expansion,” according to a report released by the council earlier this year. “Meanwhile, 340B is failing to sufficiently benefit the vulnerable patients the program was intended to serve.”
Rep. Doris Matsui, D-Calif., and Sen Peter Welch, D-Vt., on Tuesday introduced the 340B PATIENTS (Pharmaceutical Access To Invest in Essential, Needed Treatments and Support) Act. The council is concerned that the growth of the 340B program is raising costs for employers and working families by fueling hospital-physician consolidation, affecting discounts in the commercial market and promoting increased use of higher-cost therapies.
“The 340B PATIENTS Act could further expand the program and accelerate this trend by, among other things, requiring that the 340B discount prices be offered to covered entities regardless of the manner or location in which a drug is dispensed, including if a covered entity uses a contract pharmacy to dispense 340B drugs to the entity’s patients,” Schuman said.
The council’s report documented the rapid growth of the program, especially since 2010:
- It now accounts for nearly $1 of every $5 spent on brand-name outpatient medicines.
- Total sales at the 340B discounted price reached $66 billion in 2023, which when measured at the undiscounted list price, is equal to an estimated $124 billion in drug spending.
- In just 10 years, annual 340B purchases grew by more than 700%, from $7.5 billion in 2013 to $53.7 billion in 2022.
The current 340B program increases employer health care costs, directly and indirectly, by compromising the availability of prescription drug rebates and discounts otherwise available to employers; promoting increased use of higher-cost medicines; and fueling health care consolidation, which shifts care to more-expensive settings and raises hospital prices, the council said.
“Employers are deeply concerned about the significant cost that explosive growth of the 340B program has imposed on employer-sponsored health plans,” Schuman said. “As employers seek to ensure that the 340B program is working as it was intended and does not raise costs for employer-sponsored health plans, the council calls upon Congress to carefully consider the impact of the program, or any expansion thereof, on employers and working families.”