Adam J. Fein, president of the Drug Channels Institute, said that hospital prices are significantly higher at large 340B hospitals, resulting in an estimated $36 billion in additional healthcare costs for employers. He made this statement in a post on the social media platform X on April 8.
"Hospital prices are significantly higher at large 340B hospitals," said J. Fein. "Adding an estimated $36 billion to employers' healthcare costs. Yet another unintended consequence of the out-of-control 340B program."
According to 340B Health, the 340B Drug Pricing Program was established by Congress in 1992 to allow eligible healthcare providers to purchase outpatient drugs at significantly reduced prices. The program enables covered entities, such as hospitals and health centers, to stretch limited federal resources and provide more comprehensive services to vulnerable populations. Eligible entities include certain hospitals, community health centers, and specialized clinics that meet federal requirements.
A report by the National Alliance of Healthcare Purchaser Coalitions in 2024 found that prices at large 340B hospitals were 35% higher on average for common outpatient services compared to non-340B hospitals. The study estimated that this pricing difference results in an added $36 billion annually in healthcare costs for employers. These findings were based on an analysis of commercial claims data from over 25 million American workers and their families.
According to a report by the Berkeley Research Group in 2021, 340B hospitals represented 45% of all acute care hospitals but accounted for nearly 60% of total hospital drug reimbursement. The report found that per-patient drug reimbursement was almost twice as high at 340B hospitals compared to non-340B hospitals. These findings were based on an analysis of Medicare and commercial claims data.
As reported by the Drug Channels Institute, Fein is the President of the organization, which conducts research on pharmaceutical economics and distribution systems. He holds a Ph.D. in Managerial Science and Applied Economics from the University of Pennsylvania. His expertise includes drug pricing policy, the pharmaceutical supply chain, and healthcare market trends.
