Kasia Mulligan, spokesperson for the Patients Come First advocacy group, has raised concerns about the 340B program's lack of transparency. She argues that this allows hospitals to inflate drug costs, burdening patients and insurers, and prompting calls for a rebate model. Mulligan expressed these views in an op-ed published on February 13.
"The 340B program is a wolf in sheep's clothing," said Mulligan, National Spokesperson. "Hospitals are taking advantage of the program's lack of transparency."
According to the op-ed, the 340B program, initially designed to assist low-income patients, has evolved into a financial boon for healthcare systems. Providers are not obligated to pass on drug discount savings to patients, resulting in increased out-of-pocket expenses for those needing medication. Mulligan said, "The role of a hospital is to save lives and help those who are ill—not to profit off vulnerable patients, many of whom are Medicaid recipients."
The 340B program was established in 1992 to enable eligible safety-net healthcare providers to purchase medications at discounted prices for serving vulnerable populations. These discounts can range from 20-50% off drug costs. Compliance with the program is monitored by the Health Resources and Services Administration (HRSA), which conducts approximately 200 audits annually, according to information from 340B Health.
The New York Times reports an incident involving Virginia King, a 65-year-old cancer patient who was billed over $2,500 for a drug despite receiving treatment at a 340B hospital that had purchased it at a significant discount. The hospital charged her insurer $22,700 for a drug priced at $2,700. Following media inquiries, the hospital described it as a "misunderstanding" and resolved the charge. King subsequently switched to a clinic that billed far less with no out-of-pocket cost.
Many hospitals extend their 340B drug discounts to clinics in affluent areas where they can charge privately insured patients higher prices compared to Medicaid reimbursements. Two-thirds of hospital-affiliated 340B sites outside their main locations are situated in higher-income neighborhoods. This strategy enables hospitals to maximize profits while benefiting from drug discounts originally intended for low-income patients.
According to her op-ed, Mulligan serves as the national spokesperson for Patients Come First, a consumer-focused patient advocacy group.
